Funding
They called it a wrapper. It’s worth $5.4B.
In February, the internet tried to cancel Higgsfield. By August, investors valued it at $5.4 billion.
Higgsfield, the AI video app run by Alex Mashrabov, Snap’s former head of generative AI, raised $400M in August in a round led by DST Global. In January it was valued at $1.3B. On Sept 24 it told Bloomberg its sales are running above $1B a year.
In between: racist promo clips, stock footage passed off as AI, a deleted post saying its tool “ended more than 20 creative jobs,” throttled “unlimited” plans and $1.35M in refunds, all reported by Forbes and The Register. The company called the offensive clips a mistake.
What we can’t verify: the $1B is four weeks of sales times 13, self-reported. Margins, churn and what Higgsfield pays its model suppliers aren’t public.
And most of the AI isn’t Higgsfield’s. Its Cinema Studio offers 33 models, mostly from other labs like Google, ByteDance, Kuaishou and OpenAI.
Our take: the “wrapper” insult missed the point. Owning the customer beats owning the model, for now. The risk sits upstream, with suppliers that sell their own apps.
Own the customer. Rent everything else.
Founders: if someone calls your startup a wrapper, ask them who owns the customer.
Background
Higgsfield’s chief executive, Alex Mashrabov, co-founded AI Factory, the computer-vision start-up behind Snapchat’s face filters, which Snap acquired in 2019. He later led generative AI at Snap. His co-founder and chief technology officer is Yerzat Dulat. The Higgsfield app lets people make images and video using a mix of its own tools and outside models; Forbes named OpenAI’s Sora 2 and Google’s Nano Banana among them.
In January, Higgsfield raised $80 million at a $1.3 billion valuation from investors including Accel, Menlo Ventures and GFT Ventures. In a February report on the company’s problems, Forbes said it had about 15 million users and 300,000 paying subscribers, and had paid $1.35 million in refunds after service disruptions.
DST Global led the August Series B, and Goldman Sachs, Intel Capital, Liberty Global and NTT Docomo also invested. At the time, Higgsfield put its annualized revenue at $700 million. The Next Web reported that the figure had been about $20 million a year earlier, and that business customers had gone from under a quarter of revenue in January to most of it. On Sept. 24, Mr. Mashrabov told Bloomberg that revenue under contract from business customers had grown tenfold since June, driven mostly by direct-to-consumer brands making video ads. None of these figures are audited, and the company has not always measured them the same way.
Sources
- Higgsfield raised $400mn at $5.4bn, four times its January valuation The Next Web
- Higgsfield says its four-week revenue pace tops $1B annualized RuntimeWire
- Vídeos racistas e calotes: o lado sombrio do crescimento meteórico desta startup de IA Forbes Brasil
- Higgsfield Secures US$400 Million Series B At US$5.4 Billion Valuation Business Today (Malaysia)
The carousel
13 slides · Open on Instagram
Disclosure: VPRWRE drafts with Claude, Anthropic’s AI.