This startup is betting AI will transform the virtual avatar market. Read the pitch deck it used to raise $7 million.

Isaac Bratzel is the CEO of AvatarOS. Courtesy of AvatarOS

• AvatarOS, a virtual avatar startup founded by Isaac Bratzel, closed a $7 million seed investment.
• Bratzel previously worked for the company behind Lil Miquela, a popular virtual influencer.
• Read the 11-page pitch deck the startup used while raising venture capital.

AvatarOS is betting that AI can supercharge the market for virtual influencers.

Founded by Isaac Bratzel, the startup is building digital avatars for social media, gaming, apps, and other immersive experiences.

AvatarOS announced this week a $7 million seed investment led by venture capital firm M13. Andreessen Horowitz Games Fund, HF0, Valia Ventures, and Mento VC also participated in the round. AvatarOS has raised $8 million in total since its founding in 2022.

This isn't Bratzel's first rodeo working with digital avatars.

Remember Lil Miquela?

If you don't, she was a pioneering virtual influencer and has over 2 million Instagram followers. Bratzel led the creation of her avatar while at the virtual influencer startup Brud, which was later acquired by NFT startup Dapper Labs in 2021. The Miquela character has been leveraged by brands like Chanel and Prada in marketing campaigns and even has a music career.

Bratzel said Miquela had one major limitation, however. Animation is expensive, and some projects with potential brands or partners simply "weren't doable," he said.

One example, which Bratzel outlines in AvatarOS's investor pitch deck, was Miquela being featured in HBO's hit show "Euphoria."

"It just wasn't feasible because of the technical limitations," Bratzel said. It would have cost about $3,000 per second to animate Miquela, per the pitch deck. With advancements in AI, technical limitations for animation are lower than ever, Bratzel said.

One character already developed by this technology is a version of Bratzel himself (who also makes an appearance in the pitch deck).

M13's Latif Peracha, who led the deal, told BI that while running due diligence on AvatarOS prior to investing, he spoke with this virtual version of Bratzel for an hour, discussing hobbies like running and basketball.

While virtual influencers are one application for AvatarOS, Bratzel said the company is broadly thinking about how any "character-driven content" could be used across several platforms, pointing to video games as an example.

"You have this character, you have all these assets, but the social media and the marketing for how you do that is very disjointed," he said.

Bratzel said video game companies could use AvatarOS to create avatars of game characters with their own social media accounts and become virtual influencers for the game brand.

The company is also eyeing partnerships with celebrities and sports figures.

"It feels like the right time where you can scale this type of application," Latif said.

Read the 11-page pitch deck AvatarOS used while raising its $7 million seed investment round.

Note: Some details have been redacted, and the deck has been altered so that it can be shared publicly.

Read next