Decoding GenAI Startup Invideo’s Explosive $30 Mn Revenue Run, 4X User Growth

Making videos is an arduous task, even for the ones who are passionate about this line of work. This is probably what led to the inception of Invideo, a text-to-video-generating GenAI platform, in 2017. It was a time when many Indians were still new to the concept of GenAI. However, the ones who were connected nine fathoms deep with this emerging tech were doing everything in their capacity to craft the country’s GenAI dream.

Hell-bent on making waves in the global content creator ecosystem with their indigenous AI video-generating platform was Sanket Shah. Fuelling the vision was anticipation that AI and ML were set to change the game for everyone in the not-so-distant future.  

Later in 2022, Shah was joined by Anshul Khandelwal as Invideo’s CTO and cofounder. 

But the original belief has continued to serve as the bedrock for Invideo. The startup set off on its journey as an enterprise-focussed solution provider before embracing the B2C route two years after its incorporation.

Invideo’s first product was an AI-based video editor that allowed users to create videos through an automated workflow, convert existing pieces of static content into videos and add automated voice overs in multiple Indian languages. 

Since then, the startup has not looked back, despite hitting rock bottom during the pandemic. Interestingly, what has kept them going is their broader vision of eliminating disruptions in the video creation process through their tech. Consequently, the cofounders claim to close FY24 with $30 Mn in annual revenues, even after plateauing for two years (in 2021 and 2022). 

Consequently, the cofounders claim to close FY24 with $30 Mn in annual revenues, even after plateauing for two years (in 2021 and 2022). 

The Early Days Of Invideo

From 2017 to 2019, Invideo’s primary target was enterprises, but around March that year, the founders realised that there was a vast potential on the consumer side as well.

The thesis was not entirely unfounded. Video creation was growing fast, the likes of Canva and others had already familiarised the most active creative users with online creation tools, so Invideo just had to market itself in the right manner.

The shift from enterprises to B2B and B2C coincided with attention from early-stage investors. Invideo was part of Peak XV’s second Surge cohort (then known as Sequoia Surge) in November 2019 and raised $2.5 Mn from Peak XV and others.

Between 2019 and 2021, Shah and Vakharia built a more feature-rich video creation platform and pushed the accelerator on the growth front.

Despite the exit of cofounder Chheda in 2020, in the first two years after the seed round, Invideo touched a peak annual revenue of $7 Mn, cofounder & CEO Shah recalled.

But since 2021, GenAI and ChatGPT have rapidly entered mainstream consciousness, and that’s when Invideo realised it could capitalise on this market momentum and build something for the GenAI age. It also helped that 2021 was the year when investors were taking large bets. The startup raised $15 Mn in its Series A from Peak XV, Tiger Global, Hummingbird, RTP Global and others.

By January 2022, Shah decided that Invideo was ready for another major jump. Anshul Khandelwal came in as an SVP in the engineering team in January 2022 and was elevated to cofounder and CTO in October 2022. The new product direction also saw the exit of cofounder Vakharia, who is currently part of the founding team of Matrix-backed SiftHub.

Since late 2022, Invideo has been led largely by Shah and Khandelwal, and coincidentally, this was also the phase when Shah’s original vision that AI will change everything is finally proving real. And it’s also where the real Invideo story began.

Invideo’s Product-Led Hypergrowth 

Shah recalled that in 2022, Invideo had about 50K-60K paid users. But GenAI was exploding and users were harnessing its potential to create images and short GIFs. 

Invideo was certain that consumers would pay for a video engine that saves their time and effort.

“I feel the best products are built at the intersection of what’s possible right now to the consumer’s needs. AI is just a tool to facilitate this realisation. The core ethos of the revamp was simple, 80% of our users should be able to create a better quality output within three minutes versus within one and a half hours,” Shah told Inc42. 

He believes that all SaaS businesses in the world are in the business of selling time, even if it’s a SaaS tool for consumers. Invideo’s larger vision is to help all users become AI-powered directors without spending hours learning the technicalities. 

Focussing too sharply on the product is often derided by investors and external observers. But for Shah, product-led growth is just about everything. Adding the right pieces to the product, fleshing it out and pulling users towards paid plans has translated into 4X growth in a matter of months in FY24, he claimed. 

From around 15K new signups in mid-2023, Invideo today claims to have over 60K new signups per day. The top-of-the-funnel (ToFu) growth is encouraging, and instead of spending millions on marketing, Shah prefers to let the product bring in paid users. 

In the initial versions of Invideo, the machine-led decisions were centred around optimising video creation through automatic music selection, video style selection, storyboarding automation and media matching.

Having already fine-tuned these models, Invideo’s next focus was on taking existing B-roll footage and stitching it within the video. This footage could be stock videos or user-captured, but is essential in helping create strong video narratives. 

Shah believes that adding this feature helps creators add a sense of time and place to their video, as well as layers of meaning to the story told. Typically, capturing or selecting B-roll footage and splicing it seamlessly into the final output is an arduous process and requires hours of work on an editing station, which just takes a few minutes on Invideo, Shah told us.

With these new product features driving growth, Invideo also raised a Series B funding of $35 Mn in 2022 from existing investors 

The company plans to expand the software’s directorial abilities to A-roll, SFX, and VFX in the near future. Without specifying, Shah said that three new product features can be expected within this year.

“We want to help people create Netflix-like documentaries from their homes and it’s possible with what GenAI allows us to do,” the CEO said. 

Invideo’s Top Line Focus 

With the existing paid user base, Shah told us the startup expects to close FY24 at around $30 Mn. But without the audited financials, these claims are as yet unverified. The company operates under a Singapore-registered parent entity, which files the consolidated financials. 

Shah said that Invideo has focussed its efforts on building the topline, even if that means that fewer users are converting to paid customers The acquisition strategy is geared toward identifying and catering to individuals that have high intent for video creation and allowing them to use the product as quickly as possible. 

Prioritising the needs of these users over immediate revenue generation will pay off in the long run, the CEO believes.

“Consequently, only 2% of our users convert to paid subscriptions. We prioritise input metrics over output metrics, believing that if we get the former right, the latter will naturally follow. We’re experiencing 60k daily sign-ups, with 40% coming from organic channels,” he added.

Invideo is free for users looking to create 10 minutes of video creation per week and four video exports and 10 GB storage space for raw footage. 

The paid service charges between $10 and $200 per user for 50 minutes of video creation, 20 voice clones and up to 500 minutes of runtime without watermarks. Users paying also get access to stock images and unlimited exports. 

There is an even higher tier with prices ranging from $48 to $480 for up to 2,000 minutes of video creation.

Despite raising $35 Mn in a tough year for funding in 2022, Shah said there was a conscious decision to not dip into those funds. He claimed the company has over $30 Mn in its bank accounts, but these claims could not be independently verified. 

Pushing The Product-Led Growth Envelope

Invideo’s growth story has coincided with the growing investor interest in AI-led startups and GenAI in particular. Indeed, investors are more bullish about applications such as Invideo that are leveraging AI for improved outcomes for customers compared to existing software. 

Despite the favourable trend, Shah plans to steer clear of investor talks for the time being. Invideo won’t be raising fresh capital in the first half of the year at the very least, and after that, only if the market conditions suit his goals. 

Shah believes that investors are still offering relatively low valuations in terms of revenue multiples, and Invideo would be better off investing from its books and bank rather than raising funds at untenable valuations.

With newer startups such as Rephrase.ai, Trainn.co, Clueso, Hippo Video, and others focussing on generative videos, there is a possibility of many of these models overlapping with Invideo in the future. Shah says he sees the possibility of reaching a valuation of $150 Mn-$200 Mn before the end of the year based on the revenue growth. 

He also believes that only a select few of these competitors will thrive in the competitive landscape for the long term as achieving the right balance of AI-product fit, user experience, brand identity, distribution, and company culture is critical for survival and difficult to establish. 

But given the growing competition within the industry due to the GenAI boom, the company would undoubtedly be burning some cash in the next few months. 

As for marketing, Shah turns to product-led growth again, because marketing in the B2C SaaS domain is challenging and cannot be solely solved with capital investments. “Creativity has been integral to our success. It’s not always tangible, but it manifests in unique ways—like co-branded watermarking — which enhances brand recall for our clients and ourselves, without traditional advertising.”

Though he’s also quick to admit that such bold calls may not always work out in Invideo’s favour. But for the past two years, they have.

[Edited by Nikhil Subramaniam]

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