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AI ad generation platform Melius raises $25M: ex-Ramp engineers pivot after scrapping their first product
According to TechCrunch, New York AI startup Melius has announced $25 million in total funding, including a $20 million Series A led by CRV and a $5 million seed round led by General Catalyst. Three former Ramp engineers abandoned their original tool for managing ad spend to build a platform that generates ad campaigns, images and videos from everyday language, joining Higgsfield and others in the race for the AI ad creative market.
About 6 min read
What happened
According to TechCrunch, New York-based Melius announced on Tuesday, October 6, that it has raised $25 million in total funding: a $20 million Series A led by CRV and a $5 million seed round led by General Catalyst. A seed round is a startup's earliest funding, while a Series A is the larger round that follows it; the "lead" investor is the firm that heads up a given round. TechCrunch describes Melius as an AI platform for generating ad campaigns, images and videos, while the company describes its product as an "agents lab for creative work." An "agent" here means an AI program that can complete tasks automatically based on instructions.
Melius also told TechCrunch that its annualized revenue exceeded $1 million within two months of coming out of stealth mode in July. Stealth mode is the phase in which a startup develops quietly without public promotion before launching; annualized revenue projects a full year's figure from the current revenue rate. Note that this revenue figure is the company's own claim and so far appears only in TechCrunch's report.
From scrapping it all to starting over
According to TechCrunch, Melius's three co-founders, Joowon Kim, Young Kim and Arnav Ramu, all previously worked as engineers at Ramp, a corporate spend and finance software company. When the company first launched more than a year ago, it set out to build an AI-powered performance marketing tool to help marketers manage and optimize ad spend. Performance marketing is the practice of placing and adjusting ads to target measurable outcomes such as clicks and purchases.
After more than six months of development, however, the founders concluded the idea wasn't working. Joowon Kim told TechCrunch: "We scrapped the entire codebase; we burned all of it." The team then turned to what they saw as a bigger opportunity: tools that directly generate the creative assets and ad campaigns themselves, and launched the new platform nearly a year after their first launch.
As for why engineers with a finance software background would build ad generation, Joowon Kim describes himself as a social media influencer who has loved making short videos since elementary school and once dreamed of becoming a famous YouTuber. According to TechCrunch, he wants Melius to let anyone, including seasoned creative directors, turn ideas into finished work using everyday language.
The competitive landscape for AI ad creative
TechCrunch notes that Melius is not the only startup using AI to help ad agencies, marketers and brands produce creative. The table below summarizes the companies mentioned in the report; all figures come from TechCrunch's reporting or the companies' own statements.
| Company | Information in the report | Nature of the source |
|---|---|---|
| Melius | $25 million in total funding; says annualized revenue topped $1 million within two months of exiting stealth | Company announcement, reported by TechCrunch |
| Higgsfield | Founded three years ago; valued at $5.4 billion in August; annualized revenue above $700 million | TechCrunch report |
| Krea | Listed as a smaller competing startup | TechCrunch report |
| Flora AI | Listed as a smaller competing startup | TechCrunch report |
On competition, Joowon Kim acknowledged that Higgsfield "is growing like mad," but he believes the market is big enough for multiple players. He also said, "There are a lot of players, which is pretty exciting," adding that it shows there are customers to win and real demand in the market.
What it means for general readers
- Melius's pivot shows the team believes directly producing ad content is a bigger opportunity than helping manage ad spend.
- Melius pitches letting anyone produce ad images and videos with everyday language, and TechCrunch also names similar companies such as Higgsfield, Krea and Flora AI, so brands and marketers have a growing choice of AI creative tools.
- Revenue and growth figures self-reported by startups should be read as company claims, not verified facts.
Frequently asked questions
What does Melius do?
According to TechCrunch, Melius is an AI platform for generating ad campaigns, images and videos. The company calls itself an "agents lab for creative work" and aims to let users turn ideas into finished work using everyday language.
How much did it raise, and who led the rounds?
According to TechCrunch, Melius announced $25 million in total funding, including a $20 million Series A led by CRV and a $5 million seed round led by General Catalyst.
Why are they said to have "scrapped their first product"?
According to TechCrunch, the team was originally building a performance marketing tool to help manage and optimize ad spend. After more than six months they decided it wasn't viable, scrapped the entire codebase, and switched to a platform that directly generates ad creative.
Are Melius's revenue figures reliable?
The annualized revenue of more than $1 million is Melius's own claim. It currently appears only in TechCrunch's report and has not been independently confirmed by other sources, so readers should treat it as a company claim.
Who are Melius's competitors?
Competitors mentioned by TechCrunch include Higgsfield, valued at $5.4 billion in August, as well as smaller startups such as Krea and Flora AI.
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