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Making digital worlds come alive
David Peterson
Last week, we finally announced our investment in Motorica, the Stockholm-based AI research lab that's revolutionizing character animation and motion synthesis. So for the newsletter today, we wanted to share a bit about what makes us so excited about what Willem, Simon and Gustav are building.
A revolution in the world of animation
For the past two decades, 3D animation has remained fundamentally unchanged. Creating high-quality character motion has required the same costly, time-intensive process: custom motion capture studios, 60+ cameras, professional actors, days of planning, weeks of shooting, and countless hours of post-processing. The result? Motion capture budgets that easily reach millions of dollars, forcing even the biggest AAA game studios and Hollywood outfits to use this technology sparingly—typically only for main characters.
Motorica is changing all of that.
Built on pioneering research from cofounders Simon Alexanderson (CTO) and Gustav Henter (Chief Scientist) during their time at KTH Royal Institute of Technology, and brought to market by serial entrepreneur Willem Demmers (CEO), Motorica has developed the world's first commercially viable generative AI model for motion synthesis. Their breakthrough enables animators to generate AAA-quality motion instantaneously, fundamentally transforming both the economics and creative process of animation.
What excites us most about Motorica isn't just the efficiency gains - it's how the technology is unleashing entirely new creative possibilities. We're witnessing a version of Jevons' paradox in action: by making motion generation dramatically cheaper and faster, Motorica is causing a massive increase in the amount of motion being created.
Studios that previously would create custom motion for just a handful of main characters are now planning to generate bespoke animations for hundreds of characters. Early deployments have reported staggering results: up to 99% reduction in animation time, with workflows that are 200x faster than traditional motion capture pipelines. One studio estimated that three years of work can now be completed in just four days.
But Motorica's true innovation lies in how it's reshaping creativity itself. Traditionally, animators spend 70% of their time on technical grunt work and only 30% on actual creative performance. Motorica flips this ratio, automating the tedious keyframing and repetitive cycles that bog down creative teams, allowing them to focus on storytelling, emotion, and innovation.
Because motion synthesis happens nearly instantaneously, the creative process becomes iterative and experimental. Instead of weeks of planning and post-processing, animators can now spend hours tweaking and playing within the platform, exploring creative possibilities that were previously cost-prohibitive.
Motion as a foundational modality of AI
We believe motion represents a foundational generative AI modality—alongside text, imagery, and video—that will become increasingly important as our world becomes more digital. Motorica's technology isn't just solving today's animation challenges; it's building the infrastructure for tomorrow's digital experiences.
Within the world of gaming, Motorica is already seeing intense demand. Not just from AAA gaming studios, but from down-market gaming studios (AA and indie developers) and mass-market animation platforms as well. But the applications extend far beyond gaming. Motorica is also seeing inbound interest from Hollywood and VFX studios, robotics and embodied AI applications, and spatial computing and XR platforms.
We're incredibly excited to work with Willem, Simon, Gustav, and the entire Motorica team as they build this groundbreaking platform. We're entering a new era where digital worlds will be alive, interactive, and populated by dynamic, lifelike characters. The demand for high-quality motion will only accelerate as gaming evolves toward "living worlds," as the metaverse takes shape, and as the barrier between the digital and physical begins to blur. And this platform has the potential to influence everything from how characters move in games and virtual worlds to how machines understand and replicate human motion in robotics, XR, and beyond. If we're lucky, the next generation of digital worlds - whether in games, films, or entirely new mediums we haven't yet imagined - will all be powered by Motorica.
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ENTERPRISE/TECH NEWS
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The rights to your face. The Danish government has decided to tackle the challenge of deepfakes by granting people copyright on their own features. “The Danish culture minister, Jakob Engel-Schmidt, said he hoped the bill before parliament would send an “unequivocal message” that everybody had the right to the way they looked and sounded. He told the Guardian: “In the bill we agree and are sending an unequivocal message that everybody has the right to their own body, their own voice and their own facial features, which is apparently not how the current law is protecting people against generative AI.” He added: “Human beings can be run through the digital copy machine and be misused for all sorts of purposes and I’m not willing to accept that.””
OpenAI goes for the jugular. According to The Information, “OpenAI has been gearing up to take on Google and Microsoft with features that let people collaborate on documents and communicate via chat in ChatGPT….But if OpenAI goes ahead with the new features, targeting the heart of Microsoft’s dominant suite of productivity apps, it could strain the companies’ already complicated relationship.”
State of AI. Iconiq released their state of AI report, focused on enterprise AI adoption. “With AI adoption being a key imperative for companies, 88% of companies analyzed have an approved budget for AI investments; however, most AI dollars are coming from existing budgets vs net new dollars On average, companies allocated 10-15% of their software procurement budget towards GenAI, implying there is additional white space for AI solutions to capture in the future.”
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Who needs VC after all? Israeli 31-year-old Maor Shlomo just sold vibe coding tool Base44 to Wix for $80M after only six months. Nevermind that rumors are that it might not be $80M up front and might not all be in cash. The achievement is remarkable. Maor ran the company solo for a long time as a side project and only added six people. Most importantly, he raised no external capital whatsoever. “For Wix, which essentially serves as a no-code platform for building websites, acquiring Base44 is a strategic step amid the rise of AI. The company plans to integrate Base44’s conversational interface into its existing tools, allowing users to quickly build full applications.”
HOW TO VENTURE
Unhinged? The Economist wonders out loud if AI valuations are “verging on the unhinged.” They might have a point. “The once-reliable measure most at risk of debasement is annual recurring revenue (ARR), central to many startup valuations. For companies selling software as a service, as most AI firms do, it used to be easy to measure. Take a typical month of subscriptions, based on the number of users (or “seats”), and multiply by 12. It was complemented by strong retention rates. Churn among customers was often less than 5% a year. As marginal costs were low, startups could burn relatively little cash before profits rolled in. It was, by and large, a stable foundation for valuations. Not so for AI startups. The revenue growth of some has been unusually rapid. Anysphere, which owns Cursor, a hit coding tool, saw its ARR surge to $500m this month, five times the level in January. Windsurf, another software-writing tool, also saw blistering growth before OpenAI agreed to buy it in May for $3bn. But how sustainable is such growth? Jamin Ball of Altimeter Capital, a VC firm, notes that companies experiment with many AI applications, which suggests they are enthusiastic but not committed to any one product. He quips that this “easy-come, easy-go” approach from customers produces ERR, or “experimental run rate”, rather than ARR. Others note that churn is often upwards of 20%. It doesn’t help that, in some cases, AI startups are charging based on usage rather than users, which is less predictable.””
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PORTFOLIO JOBS
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Technical Account Manager (Tel Aviv)
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