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Generative AI models have reached a baseline capability of producing at least a passable video from a single image or short sentence. Companies building products around these models are claiming that anyone can make a snazzy promo video if they have some images or recordings — and videos usually perform better than static images or documents.
Peak XV and Tiger Global-backed Avataar released a new tool on Monday called Velocity. It creates product videos directly based on a product link. The company would be going against the likes of Amazon and Google, who are also experimenting with AI-powered video tools for ads.
The startup’s ethos behind these tools is similar to video creation tools like Lica or Sythesia. Video creation is costly, so companies can’t make videos for everything. However, thanks to AI, the cost of video creation is getting lower, and you can generate clips in bulk.
Avataar was founded by former Microsoft and Deutsche Bank employee Sravanth Aluru in 2015. The company, which has raised over $55 million in funding, previously focused on creating interactive experiences, AI-powered imagery, and 3D models for e-commerce. The startup is now focusing more on using AI to create videos for brands.
The company said that 3D models and experiences have a higher conversion rate than videos. However, a lot more people engage with videos, so even with lower conversion rates, videos win because of the scale.
In February 2024, the company started commercially testing its AI-powered video creation tool with clients. But at that time, Avataar still had to involve people in the process to help these brands create videos. The company started testing its fully automated Velocity tool in September 2024.
Its tool is already being used by HP, Victoria’s Secret, Lowe’s, Newegg, Marina, TVS, and Bajaj to generate various product videos.
Avataar said that while brands use its services and tools to create customized videos for their flagship offerings, Velocity will be handy in creating product clips for products that aren’t strategic enough to get a video creation budget. The startup wants to drive better conversion rates for these products through informative AI-generated videos.
“We could cover entire catalogs and have videos created for all items in them through Velocity. This would improve customer experience and also drive better conversion through motion and storytelling around the product,” Aluru told TechCrunch.
The company also has an API that companies can integrate with their platforms to create product videos for automatic listings.
Aluru said that Avataar’s models or solutions differ from others because they have collected a lot of data about products through 3D rendering. He noted that brands can’t afford to have glitches in product presentation videos, and the company has made sure of that.
“Our models understand different sub-categories of products and attributes associated with them. Our tool would highlight different attributes of a hammer as compared to a smartphone. We focus a lot on better storytelling using video as a medium with an end goal to drive purchases,” he said.
Through its videos, Avataar also tries to create an aspirational value for the products apart from providing details to the customer.
The company noted that it has built guardrails around brand safety and product inaccuracies, so a model could check for inaccuracies in a creation and reject the output created by the tool.
Amir Konigsberg, an investor and founder of discontinued e-commerce startup Twiggle, said that there is an opportunity to make videos for online sales, but they have to be unique enough to stand out.
“Video generation from product links is a natural extension of automating e-commerce pipelines. Video is a proven driver of engagement and conversions, and scaling this efficiently is smart. However, there are already several companies addressing aspects of this space—like generating backgrounds, after-effects, product renders from different angles, cutouts, or photorealistic shadows. The challenge here lies in standing out, ensuring consistency, and adhering to licensing and attribution standards,” he told TechCrunch over email.
Konigsberg added that brands didn’t adopt AI-generated video solutions until now because it was challenging to maintain quality at scale. However, he hinted that due to recent advances in models, these tools can become effective for mass usage.
Ivan covers global consumer tech developments at TechCrunch. He is based out of India and has previously worked at publications including Huffington Post and The Next Web. You can reach out to him at im[at]ivanmehta[dot]com
