Built to bring one proliferating digital technology to businesses, Vidyard is now building on another that’s forecast to make an even greater impact. The Kitchener, Ont., firm is launching a new artificial intelligence tool that generates video, and announcing a US$15-million equity funding round—its first in eight years. 

Customers use Vidyard’s software to make, distribute and track video sales pitches, promos and internal communications. Over the last decade or so, it’s signed up enterprise firms like Ceridian, Flight Centre and HubSpot. Its new offering, AI Avatars, allows clients’ staff to record a short training video, then generate clips of “themselves” from a script. “There’s lots of moments where video [is] difficult to produce,” said Vidyard CEO Michael Litt, speaking during one such instance, from a parked car outside a Utah Starbucks. “AI really simplifies that process.”

The avatar tool is Vidyard’s third major release built on modern machine-learning technology, as scale-ups move to incorporate more AI into their offerings and stay ahead of the competition. Last July, it started offering a script generator. In October, it launched a prospecting tool that automatically identifies a user’s potential buyers in professional databases and sends them tailored emails. 

Over the last 18 months, the release of new large language and multimodal models has flooded the internet with machine-made media. Sales and marketing professionals have filled social platforms with posts about how OpenAI’s ChatGPT text- and Sora video-generating tools or those of competing developers can help in their work. While some would “perceive that as a threat,” said Litt, Vidyard views it as a chance to deliver the output of those systems through its platform and tools.  

The rendering quality and speed of the available AI models has improved significantly since Vidyard began working on the avatars in November 2022, he added. And the costs of using those systems and the processing power they require has dropped as providers compete and innovate. “Vidyard is very much at the application layer,” Litt said; the company is using third-party commercial and open-source models for the avatars, but declined to identify which ones. 

Litt and fellow University of Waterloo student Devon Galloway started the firm in 2010, as cloud-hosted video was starting to spread. Vidyard distinguished itself by offering the kind of deep analytics and follow-up tools for video sales and marketing that were already available for email and social campaigns, said Karamdeep Nijjar, a partner at Inovia Capital. The startup went through Y-Combinator and raised a US$1.65-million seed round in November 2011. (It was Nijjar’s first Inovia investment.)

Export Development Canada led Vidyard’s new US$15 million round, with participation from BMO Capital Partners and past backers Inovia, Battery Ventures and Bessemer Venture Partners. The company will use its new financing to fund R&D and acquisitions. Litt said the financing is an uncapped convertible note, meaning the equity will be priced at its next liquidity event.

Vidyard’s last equity round was a US$35-million Series C in January 2016, which valued the firm at US$350 million according to Pitchbook data. Like many tech scale-ups, Litt said, the firm had opportunities to “raise money at massive valuations” during the COVID-19 pandemic; sales teams’ need to pitch remotely created “a massive boom cycle” for the business. But both he and Nijjar said Vidyard’s efficient use of capital over the last eight years spared it from having to raise.

Litt said Vidyard is now cash-flow profitable. The company has 167 employees, with plans to hire. Social media posts suggest Vidyard laid off 20 per cent of its workforce in November 2023. The company would not confirm the number, but said it has adjusted staffing levels to meet economic trends and its own priorities. 

Vidyard came up in the mid-2010s with a buzzy cohort of Kitchener-Waterloo startups that was positioned as the region’s post-BlackBerry tech future. Most of those firms—the likes of Aeryon Labs, Clearpath Robotics, Kik and North—have since been acquired. 

Nijjar, a longtime investor in the region, said Vidyard has managed to keep growing and stay independent by regularly rethinking its business. “There’s massive revenue streams from products that didn’t exist five years ago,” he noted. Since the Series C, the company has launched its video-recording tool, which the avatars will plug into, as well as digital sales rooms in which clients can amass all the information they’re sharing with buyers. Nijjar also cited Vidyard’s hiring last year of COO Jonathan Lister and CFO Chris Wolfe, both former top executives at LinkedIn. 

In addition to running Vidyard, Litt and Galloway are partners in Garage Capital, a Waterloo venture firm whose portfolio is something of an index bet on the region’s startup ecosystem. Nijjar said that’s given them a window into emerging companies and technology. For example, Garage has invested in Groq, a Mountain View, Calif., firm that sells AI chips and cloud services. 

Vidyard’s video analytics tools have long helped clients automate their marketing via connections to tools that send out emails or other messages. AI “isn’t actually that new,” said Litt. “But the ability to build with it, at scale and cost effectively, certainly is.”