Two major AI video unicorns are vying for new financing, with pre - investment valuations of 36 billion and 23 billion yuan respectively.

According to a report by foreign media The Information on August 6th, informed sources revealed that AI video startup Runway is in talks with investors for a financing round of approximately $500 million (equivalent to about RMB 3.6 billion). Its pre - investment valuation is no less than $5 billion (equivalent to about RMB 35.9 billion), which is 67% higher than the $3 billion (equivalent to about RMB 21.5 billion) valuation in the previous financing round.

Meanwhile, sources said that its competitor, Luma AI, is seeking to raise at least $1.1 billion (equivalent to about RMB 7.9 billion) at a pre - investment valuation of no less than $3.2 billion (equivalent to about RMB 23 billion). This valuation is nearly 12 times higher than its $270 million (equivalent to about RMB 1.94 billion) valuation after the Series C financing in December 2024.

01.

Runway: Annualized revenue approaching $100 million but losses continue

Endorsed by Hollywood giants

Informed sources said that General Atlantic, a New York - based growth - equity investment firm that led Runway's previous financing round, and new investor Qatar Investment Authority are in talks to lead Runway's current financing round.

People familiar with the financial situation revealed that Runway's annualized revenue at the end of June exceeded $90 million (equivalent to about RMB 640 million), up from $70 million (equivalent to about RMB 500 million) at the end of 2024. However, this year - end figure did not reach the company's mid - 2024 forecast target of $84 million (equivalent to about RMB 600 million).

Based on the new valuation of $5 billion (equivalent to about RMB 35.9 billion), investors value Runway at 55 times its recent annualized revenue, which is comparable to the valuation multiples of AI applications like Harvey but lower than model developers like OpenAI. Runway also predicts that its annualized revenue will reach $265 million (equivalent to about RMB 1.9 billion) by the end of 2025, but it may be difficult to achieve this goal at the current growth rate.

Compared with other AI startups, Runway's growth is relatively slow. Anysphere, the developer of programming assistant Cursor, saw its annualized revenue soar from $50 million (equivalent to about RMB 360 million) to $500 million (equivalent to about RMB 3.6 billion) in the seven months ending in June.

Runway's revenue growth is accompanied by losses. The company disclosed to some investors that it had a loss of approximately $155 million (equivalent to about RMB 1.1 billion) before interest, taxes, depreciation, and amortization in 2024, with annual revenue of about $44 million (equivalent to about RMB 280 million).

Runway generates revenue by selling software subscription services, and users can get a specified number of usage credits per month. Its software has been used in the production of movies such as Everything Everywhere All at Once and has partnered with Lionsgate and AMC Networks, both licensing media content and customizing exclusive models for movie studios.

Since 2018, Runway has raised $545 million (equivalent to about RMB 3.9 billion) from investors such as Google, Nvidia, and Coatue Management. An informed source familiar with the current financing round revealed that this financing will bring Runway's cash reserves to approximately $1 billion (equivalent to about RMB 7.2 billion).

02.

Luma AI: Valuation expected to skyrocket 12 times in half a year

Middle - Eastern capital may lead the investment

Meanwhile, according to sources, younger competitor Luma AI is seeking to raise at least $1.1 billion (equivalent to about RMB 7.9 billion) at a pre - investment valuation of no less than $3.2 billion (equivalent to about RMB 23 billion), a figure nearly 12 times higher than its level at the beginning of 2024. The source further revealed that the company has been in talks with Middle - Eastern investors to lead the current financing round.

Luma started generating revenue after launching its AI application in November, achieving an annualized revenue of $8 million (equivalent to about RMB 57.51 million) in December. Creators and artists can pay a monthly fee to use its AI application, while studios and advertising agencies pay to use customizable exclusive models.

Since 2021, Luma has previously raised $173 million (equivalent to about RMB 1.24 billion) from investors such as Andreessen Horowitz, Nvidia, and General Catalyst.

03.

Tech giants enter the arena

Fierce competition in the video AI track

The main challenge these startups face is the increasingly fierce competition in the video AI industry. Two tech giants, Google and OpenAI, have both released upgraded versions of their video - generation models in the past nine months.

Meanwhile, Meta has had talks with some companies, including Runway, about potential acquisitions and other deals. According to a source close to Luma, Meta representatives had also contacted Luma about a possible acquisition or technology - use agreement, but the relevant negotiations have currently been suspended.

According to foreign media The Information, as these financing negotiations are taking place, startups have made some progress in persuading major studios such as Netflix, Disney, and Paramount to abandon live - action shooting and traditional editing software like Adobe Premiere Pro and switch to AI software.

AI tools can enable filmmakers to generate video clips of almost anything, from building collapses to animated characters, with just text prompts and images.

These startups are also expanding into new markets such as game - scene generation and robot - training environment simulation.

04.

Conclusion: Capital bets on the vision of "AI reshaping the film and television industry"

The financing needs of over $1.6 billion in total from the two leading startups reflect the capital market's optimism about the prospects of generative video technology. The entry of traditional tech giants has added fuel to this already competitive track. In essence, it is a bet by capital and tech companies on the vision of "AI reshaping the film and television industry".

Controversies still exist. The scenes of Hollywood actors taking to the streets to protest are still fresh in our memory, and the success of individual cases like Everything Everywhere All at Once is not yet sufficient to prove that the technology has the ability to replace traditional production on a large scale.

However, it is certain that with the improvement of tool efficiency and the reduction of production costs, AI video technology is moving from the experimental stage to industrial application.

Source: The Information

This article is from the WeChat official account "Zhidongxi". Author: Wang Han, Editor: Moying. Republished by 36Kr with permission.