Melius raises $25M after scrapping its first ad-tech product

Melius, an AI platform for generating ad campaigns, images, and videos, announced on Tuesday that it has raised a total of $25 million, including a $20 million Series A led by CRV and a $5 million seed round led by General Catalyst. Co-founder Joowon Kim says the startup has hit more than $1 million in annualized revenue within two months of coming out of stealth in July, though he admits Melius didn’t get there on its first try.

The New York-based company launched more than a year ago, when Kim and co-founders Young Kim and Arnav Ramu — who knew each other from working as engineers at corporate spending and finance software company Ramp — set out to build an AI-powered performance-marketing tool to help marketers manage and optimize ad spend. More than six months into building that product, the three decided the idea didn’t “have legs,” Kim told TechCrunch. “We scrapped the entire codebase; we burned all of it,” he said. Melius pivoted to a much larger opportunity, in Kim’s telling: building the tools that generate the creative assets and campaigns themselves. Nearly a year after its initial launch, the company unveiled the resulting platform, which it describes as an “agents lab for creative work.”

Melius isn’t alone in using AI to help agencies, marketers, and brands generate creative assets and campaigns. Rivals include fast-growing Higgsfield, a three-year-old company valued at $5.4 billion in August that has topped $700 million in annualized revenue, along with smaller startups Krea and Flora AI. Kim isn’t worried about the crowd — he argues the market is large enough that plenty of players can find customers, and that the demand in the space is real.

Kim, who describes himself as a social media influencer, traces his interest in the category back to childhood: he’s been passionate about making short videos since elementary school and once dreamed of becoming a YouTuber, though his early vlogs never took off. With Melius, he says he’s finally building the tool he wanted all along — one where anyone, including seasoned creative directors, can turn an idea into a finished campaign using plain language.

Why it matters

Investors are still betting the AI ad-creative market is big enough to support several well-funded rivals at once, rather than consolidating early around a single winner like Higgsfield.