Capsule Raises $2 Million for Collaborative Video Platform

Capsule, a platform for brands to conduct video-based question and answer sessions, was created last year as a solution to the difficulties businesses encountered when attempting to connect with customers throughout the pandemic. The company has now successfully secured $2 million in pre-seed funding. Array Ventures spearheaded the funding round, with additional investment from Bloomberg Beta and a number of individual investors.

The company’s origins lie with the creators of Phhhoto, an earlier animated GIF capture tool and social network that was ultimately surpassed by Instagram’s Boomerang feature. Phhhoto ceased operations in 2017, leading the team to establish Hypno, an experiential marketing firm. Hypno specialized in providing brands with interactive experiences at live events, such as photo booths and other camera-based platforms.

The COVID-19 pandemic significantly impacted Hypno’s business model due to the cancellation of live events. However, the underlying needs of Hypno’s client base remained consistent – they simply required alternative methods for engaging with their audiences.

This realization led to the development of Capsule. Launched the previous year, the platform provides a comprehensive solution for hosting Q&A sessions. Brands can begin with a customizable template, modifying elements like logos, colors, buttons, backgrounds, and URLs to align with their specific campaigns – functioning similarly to Squarespace, but tailored for video Q&A.

Brands formulate questions and prompts, inviting consumers to respond with brief video submissions. The resulting Q&A URL can then be shared through various channels, such as social media, or embedded directly onto a website via a new platform feature.

The consumer-generated responses are then curated to create a final video product. The technology behind Capsule’s assembly of this footage is particularly noteworthy.

Capsule automatically and efficiently processes the video content, incorporating features like music and graphics, as well as pre-roll or post-roll segments, resulting in a professionally polished final product. This is achieved through a proprietary JavaScript-based programming language that automates the integration of color, audio, graphics, and dynamic text. Users simply select the desired video style – for example, energetic or subdued.

Currently, Capsule offers approximately 20 foundational templates. Each template is fully editable, allowing for adjustments to colors, styles, and music, with options for direct uploads or selection from a library of thousands of royalty-free tracks.

 

According to Champ Bennett, co-founder of Capsule, the platform’s adaptability has resulted in a diverse range of applications. While initial clients came from Hypno’s live events network, the product quickly attracted a broader customer base.

“We consistently received feedback from both our existing and new customers highlighting the platform’s versatility,” he explains. “It proved valuable for various purposes, including user-generated content campaigns, generating social media content, building brand awareness, collecting product reviews and testimonials, and even assisting creators in producing professional-looking content more efficiently,” Bennett states.

Capsule’s initial users included prominent companies like Netflix and organizations such as OkayAfrica. Since then, the platform has secured contracts with hundreds of clients, including teams within major corporations like Google, Samsung, Salesforce, Deloitte, and The Wall Street Journal, as well as numerous small and medium-sized businesses, including Paloma Health. The USO is also utilizing Capsule.

These organizations and others are actively seeking tools to facilitate the creation of original, short-form video content, which is increasingly central to their marketing strategies. Capsule points to data indicating that video click-through rates are two to three times higher than those of static images, and that 95% of businesses are increasing their investment in video annually.

The pandemic intensified the existing demand for video content, but businesses encountered difficulties in scaling video production.

“Brands are increasingly finding innovative ways to create video content,” says Bennett. “One approach involves leveraging creators within their organizations – employees, founders, partners, influencers, or even loyal customers – to generate content on their behalf. We refer to this as community-generated content, an evolution of user-generated content, recognizing that content can originate from any source,” he adds.

Capsule specifically sought to collaborate with Shruti Gandhi, a General Partner at Array Ventures, due to her strong engineering background and deep understanding of the platform’s core technology. She subsequently introduced the team to Bloomberg Beta in New York, who also quickly recognized the potential of Capsule, Bennett explains.

The new funding will be used to hire a product designer and to develop enhanced collaboration features, such as a content upvoting system.

Looking ahead, the company envisions its platform empowering a wider range of individuals to participate in video creation.

“Many individuals within businesses possess the creative capacity to produce video content, but lack the technical expertise. They are not video editors,” Bennett says. “Our goal is to unlock this untapped creative potential within businesses of all sizes.”