How This 26-Year-Old First-Time Founder Raised $55 Million for Her AI Startup

In November 2023, generative AI-powered video startup Pika announced that it had raised $55 million from a combination of angel investors and VC firms including Lightspeed Venture Partners and Factorial Capital. The raise positions Pika as a potential competitor to OpenAI's in-development video generation model, Sora. Pika was launched in 2023 by 26-year-old CEO Demi Guo, who, along with her friend and co-founder Chenlin Meng, dropped out of Stanford University's artificial intelligence PhD program to start the company.

One of the keys to Pika's fundraising success is a professional network Guo has been cultivating since middle school. Mentors that Guo met through computer science competitions like the International Olympiad in Informatics (IOI), in which she won a silver medal in 2015, helped secure Pika's first meetings with investors.

Guo enrolled in the Stanford program in 2021, just a few months after graduating from Harvard. During the winter of 2022-2023, she and some classmates took part in an "AI Film Festival," organized by AI video creation app Runway, but were frustrated with the quality of the existing AI video tools. Guo and Meng were convinced they could develop a better video-generation model and a more streamlined user interface system, but they'd need money and time. In April 2023, they dropped out of the Stanford program and founded Pika.

Pika's product allows users to enter a prompt like "cinematic, an extremely handsome reporter writes about an exciting new AI company," and receive a three-second AI-generated video clip. New users can generate 25 clips for free, after which they have the option to upgrade to an $8 per month premium subscription. Using Pika to create content for commercial use costs $58 per month for a Pro subscription.

Soon after leaving Stanford, Guo caught up with a mentor she'd met through the IOI, the middle school competition that ignited her love of AI. "I mentioned that I was working on an AI video generation model, and he was immediately interested," says Guo. "He thought it had a lot of promise." That mentor offered to connect Guo with an investor he thought would be interested in Pika: former Github CEO Nat Friedman. 

Guo and Meng presented early investors with an impressive early-stage demo of Pika, powered by a single graphics processing unit (GPU). Most generative AI tech is extremely compute-intensive and requires whole warehouses of GPUs to provide enough power to function. Friedman and investing partner Daniel Gross, the former head of AI at Y-Combinator, made a $15 million pre-seed investment and provided additional GPUs to speed up the company's process of training new AI models. 

Guo also leveraged her former work experience to find investors. In its series A round of funding, Pika raised $40 million from Lightspeed Venture Partners and tech luminaries like Quora co-founder and CEO Adam D'Angelo, who first crossed paths with Guo in 2016 when she was a high school intern for Quora. Like Guo, D'Angelo was also a silver medalist at the IOI, back when he competed in 2002. 

Beyond Pika's demo, Guo says investors have been most taken by her team's ability to refine its product quickly. "In an industry that is changing this quickly, it's imperative that you're able to be efficient and adaptive," says Guo. "Having a small, passionate, focused team has allowed us to do that."