We don't want technology to break free - a Hungarian team is working on it, so deepfake videos will be an ethical business
The White Summers European Office has been very busy! It was a pleasure for them to work on this transaction with client, Colossyan.
A Hungarian-born startup in Copenhagen can detect if a video is fake, but no one was a buyer of their technology. With a clever change of direction and the pulling up of the Colossyan brand, they are now trying to take the lead in an emerging market: they are producing manipulated videos themselves, but for ethical purposes. The market for synthetic media is growing, but the risk is still huge. The consortium of investors, led by the Hungarian Dayone Capital, also knows this. Exclusive excerpts from a business story that says more than anything about the age we live in.
Student riots broke out in Hong Kong at the end of 2019, barricades were also erected at some universities, and young people all felt historical times. It was such a noisy chaos that sparked real flames. Not only the Chinese state apparatus and with it its military arsenal stood against the students - but also the propaganda machine built on false news.
Dominik Kovács, then 22, suddenly found himself in the thick of events - and this was true not only for him personally, but also for his company. Launched in Copenhagen, originally known as Defudger, the mission has taken on a mission to really make the world a better place: an effective tool has been developed to detect manipulated images and videos spreading on the Internet.
After several clear technological breakthroughs, their business model was beaten down by the spirit of the age as the Chinese Communist state power underwent resistance from Hong Kong students.
But just like in Hong Kong, the Dominicans didn’t give up.
The birth history of their company is truly a perfect age: Hungarian engineers who moved to Copenhagen to study further came together and came close to solving one of the most serious problems of our time.
Their system is capable of filtering out fake photos and visually manipulated videos (deepfake videos) - the technology put together by a brilliant engineering solution was appreciatively snapped by everyone, but when word got to the business, the doors closed.
“It was a huge mistake not to start with the question: why would you pay? Is it such a problem that they paid for it? ”
- says self-critically Dominik Kovács, co-founder of the company, while sitting in the meeting room of a community office in Budapest.
Dominik Kovács in Budapest - the company is already global, they have employees in Asia, America and all over Europe. Photo: László Sebestyén
The reality of the beginning of the 21st century is that although fake news and the increasing number of fake pictures and videos can generate very serious social tensions, the Western business elite was left cold by the offer of a Hungarian startup capable of detecting them. The founders had not yet doubted this, so Colossyan was formed.
The knowledge capital gathered by detecting deepfake videos is being used by the founders in a new field: they have started making manipulated videos themselves, but ethically. A consortium of investors led by the Hungarian Dayone Caplital saw the imagination in them, it seems that the new product also has a market - to prove it, they received 1 million euros (360 million forints). For the sake of all of us, we hope that the primary use of their technology will be later.
Let’s do good to society and start a company on it!
The company was founded by Dominik Kovács, Zoltán Kovács (name relatives only) and Kristóf Szabó - in Denmark. “We wanted innovative higher education,” Dominik sums up how they got on separate trips to Copenhagen. The Technical University of Denmark (DTU) is one of the best in its field. Zoltán and Dominik moved out in 2017 and met here. Kristóf Szabó, four years older than them, was already studying for a master's degree at that time, and he also had a video company.
Defudger / Colossyan's founding team: Kristóf Szabó, Zoltán Kovács and Dominik Kovács in Copenhagen.
After reading the biography of Dominik Elon Musk, he decided to continue his studies as an engineer. They were given a strong technological foundation during the training and were placed in a motivating, inspiring environment.
“They provided the framework to focus on what interests us. It was key to where we are now. ”
Dominic was attracted to being an entrepreneur, also because of family examples. “I soon settled with the illusion that I was my own master. The market and the customer are the boss. ” He was out working as a loader in stores, digging into programming — something he hadn’t dealt with before. “I used to think it could be very boring, but I wanted to keep improving in this environment - and I was given time to do so. I cut in. ” In the meantime, he also went to startup events, one of them met Kristóff, and they started working together on a project basis. With Zoltán, they moved towards artificial intelligence and learning algorithms in their studies.
The turning point was the fall of 2018, when the whole world raised its head to a deepfake video in which Barack Obama’s mouth movements were replaced by another. The result: sentences were put into the mouth of the former American president that he never said.
It fell to the general public at this point that technology had gone so far as to not only be able to show reality accurately - but to be able to create something completely new instead. Kristof suggested that fake news videos should be detected. Zol was also added to the team at Dominik's initiative. On a cold evening in Copenhagen, three people had already gathered at the Coffee Industry Sweden bar. Defudger was born that night.
"We were with him that it's a pretty fun project and has social responsibility in it, which is very important to us."
To keep the work going, Kristóf entered the team almost immediately for the prestigious Venture Cup idea competition, they also made it to the final in January 2019, which was serious feedback.
They spent their weekends in the basement to build up the technology
Their vision was to sell the technology to media companies.
“Everyone said we’re not going to be able to do it and that Facebook will put it together anyway. But what a big technology company has no interest in will not deal with. ”
Although Microsoft, Google and Facebook are making improvements in this area, they are not making any spectacular progress . Nonetheless, Dominik said it would have improved the reputation of even large platforms in the long run if they bought their service, but well Silicon Valley is not the Jutland Peninsula.
From February, Dominik and Zoli worked to have their first product - while also bidding for public funds (two were won). The Danish state has built a serious strategy to support startups, an increasingly vibrant ecosystem and internationally successful companies are attracting talent and innovation from abroad - the intellectual property produced in this way enriches the knowledge-intensive Danish economy. Meanwhile, start-ups can finance their most vulnerable phase without having to give up a stake for it.
Imre Nagy (Head of Engineering) and Dominik Kovács are responsible for product development in Budapest. Photo: László Sebestyén
To be able to detect pseudo-videos, they needed data from which their algorithm would learn what is real and what is not. Since they could not obtain such, they began by detecting images. The so-called shallowfake images have also caused quite a bit - this is unknown to us, Hungarians as well - typically photos whose context is changed. “A lot of that came out during the covid: fake news sites wrote on scenes cut from the film that this is now Italy, where the corpses lie on top of each other,” Dominik explains. To do this, they could already write an algorithm that examined the image itself and its environment, without the need for a learning data set. Computing capacity, on the other hand, is. The cradle of the product was one of DTU’s data labs, where high-performance computers can be used by students as well, but not for everything.
Dominik’s eyes smile as he closes briefly, “we wrote a few scripts quickly so we could work on the machines”. The team arrived in the basement room at 7 a.m. Saturday morning and had to work until midnight. They knew that no one was going there at that time. "Classic: work, pizza and beer?" I raise, and Dominik shakes his head. It would have been a little expensive in Copenhagen.
Deepfake videos: how do they notice simply what others barely do?
They began working with an image and video database company, Indieframe, to whom they were able to deliver a so-called API. By 2019, others had already tried similar solutions, but this - due to the video cards - required an awful amount of computing capacity. "Ours was a typical startup solution, the code wasn't nice, but it worked." Lay people have to imagine this in such a way that the image database manager allowed the boys to solve their own images, and that chose which images had bad captions or other data, but also examined the pixels in detail. According to Dominik, one of their strengths to this day is that they can transfer the results of scientific research and academia very well to market applications.
“Our algorithm looked for inconsistencies within the images. By combing the pixels, he looked for irregularities or missing elements from regularly repeating parts. ”
These are little things where manipulation can be seen in action - but what exactly these clues are, they were also taken from scientific results, they did not invent themselves.
Nonetheless, Defudger-Colossyan was already a deeptech company at the time, where serious research supported the technology brought to market. “It separates us from 90 percent of startups. We’re not working on a problem and we’re going to figure something out for it. We say that the technology is specific and we look for the place of use, the problem, where it can be best used.
There is a huge risk in this, but if we drop the technology in the right place, we will be able to modernize and move an entire market forward. ”
In the medium term, this requires a first-class research team, which is not cheap. When the company started, they were looking for young talent in their environment who was not given a chance by the Danish labor market, and an enthusiastic, international team was formed. In getting Colossyan this far, they also have a huge role to play and an important element of their growth strategy is to keep the team as good as possible.
The Colossyan team in Budapest. Dominik Kovács (CPO, co-founder), Kristóf Szabó (CEO, co-founder - was not in Hungary during the interview), Dániel Gál (Fullstack Engineer), Zoltán Kovács (CTO, co-founder - was not in Hungary during the interview), Imre Nagy (Head of Engineering). They will expand further soon. Photo: László Sebestyén
The first major capital came, and the team scattered around the world
Defudger, the joint investment company of Porsche and the publishing company Axel Springer, which is also present in Hungary, focusing on early stage, closed its first investment circle where it has already given up its shareholding with APX in Berlin . The team at the time was still targeting one of Europe’s largest media markets, Germany.
In the fall of 2019, however, they dispersed: Kristóf, who had been in charge of finance until then, remained in Germany, Zoli went to Singapore, and Dominik went to Hong Kong - both of whom continued their studies on artificial intelligence at the world’s top universities. They also continued to work focused on their startups, and from September onwards, they were given a modest salary.
“It was then that we were introduced to the company culture that no matter the country border, remote we still operate today. We also have colleagues in America, Europe and Asia. ”
The team already had two employees at the time, and the meetings were held at 11 a.m. Asian time, respectively.
The supportive environment they encountered in Denmark not only started the team, but also partly defines the company’s culture. Photo: László Sebestyén
What a social impact a company like the one they built could have in an ideal world could be experienced by Dominik in Hong Kong: student riots erupted. He learned from the best Chinese professors about the future of artificial intelligence, while trying to come up with a solution at local media companies. “No one bet, even though I even bought a suit. In Denmark, you can also go to the Prime Minister in bezzeg rubber boots. ”
Yet Asia is currently the largest emerging market that the Danish-Hungarian startup wants to break into: this is the synthetic media.
The bottom line is that audiovisual content no longer includes living, flesh-and-blood people, but digitally created, realistic characters.
They read news, run a show, love the flu, and have a really good trait: they don’t do anything that makes human labor expensive. They don’t ask for pay, they don’t get sick and they don’t cause scandals. This is the pinnacle of technology that is already there in our chat windows when we chat with robots instead of live people.
Due to the wave of protests in Hong Kong, DTU recalled its students. Dominik returned home after a minor Asian wander. He connected the pleasant with the useful.
"There was also an example of me being locked up in a hotel in Vietnam for 5 days and just programming."
By December, their four algorithms had already examined the images, and they were able to determine many things from a set of pixels placed in front of them. Technology worked, but the question became more and more torturous: does anyone need it? They went through the biggest media companies in Europe - they already had something to put on the table. Everyone was offered a free trial. "In the end, they never said okay, we pay."
This will make ethical and big business from manipulated videos
At present, the legal environment does not force either media service providers or platforms to sacrifice more money to filter out fake content - while technology has advanced in their production, it is becoming easier to manipulate but produce lifelike videos and images, which is no longer necessary today. serious software.
"We realized that what we were building was not the top weapon of capitalism now raging."
They even talked to Facebook: the general response was to “come back in 4-5 years because that wouldn’t pay off for us right now”. The team had to pivot , no matter how painful.
In order to show their technology and knowledge to the market, Defudger has been generating deepfake videos itself over the years - serious knowledge in this area has accumulated within the company. This was also the essence of the pivot: it is not the detection but the production of the manipulated (synthetic) videos. "As a startup, we had to find a niche market where the product could be iterated quickly, the feedback fast."
Producing videos is basically still expensive, while customizing them is almost impossible. With a brand new brand, the team shifted the focus here, giving birth to Colossyan. The company now helps their customers tailor video messages to specific people or audiences easily and simply. There is a growing demand for this.
“We’re actually making a video out of text. From what you've emailed so far, you can make a customized video out of it. And all the research shows that the effect of video messages is stronger, generating more interactions. That is our added value. ”
It’s good to have 10 startups that produce such videos today - however, Dominik says it’s a big competitive advantage that no one has as much experience in detection as them. We could also say that this nascent technology is known back and forth. "We're creating a new method of communication that we call video first."
According to Colossyan, this approach will affect the entire communications industry. Emerging trends are in favor of the new direction and especially the fact that those who did not even pay for detection were asked for videos. "We got good money for these ad hoc assignments."
At a pharmacy conference, for example, they “took Angela Merkel away” to give an opening speech, but there was a presentation in Davos at the request of the World Economic Forum about what their technology can do.
According to Dominik, the clear feedback from the market is that they want to reach the millenial age and can only be reached with video, be it in-house training or personalized advertisements.
And everyone is interested in who can produce personalized video content as cheaply as possible.
Colossyan's vision is that the media sector will be transformed within 5-10 years, and synthetic media will gain ground. “This is the dilemma for truck drivers,” Dominik says of what will happen to content-producing people who can be replaced by robots (just like self-driving technology for drivers). Their role may be partially transformed, but they will not disappear.
We don’t want technology to break free
The company’s developments will get there by the end of the summer, if another mouth movement, with different text, is cut into an original video, a layman will not tell you that the material has been manipulated.
Even if commissioned, Colossyan is producing exactly what it has been fighting against. Is it okay if the host doesn’t know you’re watching a manipulated video, even if it was made for ethical purposes?
“We don’t want technology to break free. It's not a B2C product, we don't want to reach end users. ” They want to work closely with corporate clients to keep control in their hands - it’s also true that the legal and other responsibilities to the target audience they want to reach with the videos are largely borne by the client.
One of the big players in the markets is Synthesia, which has relied on internal corporate videos. Colossyan would move in the direction of advertisements, as they still present a constructed reality today, saying that culturally, the easiest way for consumers to jump here is that the characters are not real people.
“It could be the market niche we need, but we need to find uses where people aren’t bothered. It could also be an area where there was no video technology so far because it was expensive. ”
How much will the text become a video for?
Few know the technology behind deepfake videos as deeply as they do. Photo: László Sebestyén
Pricing will be a key issue. “Our competitors charge € 20-30 for up to 50 videos, we want to be cheaper than that. The goal is to produce videos at a lower unit price, but up to 5,000 or 50,000. ” Dominik says they are technologically there among the more mature racers. Colossyan - like most Hungarian startups - would enchant the world in a Software-as-a-service model, where subscribing customers could modify their videos for the right purpose by dragging them to the right interface.
Together with the pivot, they did not run out of money completely, partly from the possible projects, partly from the seed circle, but by the summer of 2021 they ran out of funding. They are now among the listed actors in their field, but in order to level up, they have to win the best skulls to work together. This already required serious investor capital.
In January 2021, Dayone Capital contacted the Dominicans, and the conversation ended with a reshaped company structure by June and an investment circle. The leading investor is the Hungarian Dayone Capital, in addition to which - as a sign of its confidence - APX also added new capital, several angel investors joined here, partly from Dayone's network of contacts and partly from the international relations system of the Dominicans. Finally, an investment round of EUR 1 million (HUF 360 million) was closed at the beginning of July.
It's an all or nothing story
“We consciously started to discover talents who have a Hungarian connection. We have to be proactive in this, because international funds come in and strike at good companies - the Craft deal is a good example of this, ”Zsolt Weiszbart, Dayone Capital's partner, tells forbes.hu about the contact.
“In Eastern Europe, deep tech companies are preferred because they build technology at a lower price level. The team had a track record, proving that they can build a product, ”he explains why they decided to invest. However, the risks are high.
“It’s a bet, we see that too, because this area is very new. However, such investments need to be made in the next 5 to 10 years.
Plus, it’s a typically industry that can explode a lot, and the Dominicans are now at the forefront. ”
“I think we’re ready by now,” Dominik says in a calm voice, leaning back. Along with the company structure, the processes were also redesigned, and in fact, there were those who got rid of them because they felt they were not ready to take the step ahead. In addition to the American parent company, there is a Hungarian subsidiary, most of the project team will work from Budapest, but the company is also present and operating globally, they will not exhaust the gray stock, all new employees can stay where they are.
"We took classic seed pricing, we got a part for the investment that meets international standards, " says Zsolt Weiszabart. It would come as no surprise that, in addition to the conservative business done so far, the capital now raised would last until the next, Series A round. Dominik counts as a 12-18 month runway .
“By the end of next year, we want to get there to have a niche market where we can solve only one problem globally, with very high quality, but it does it very well,” says Dominik. The company, which now has 9 employees, wants to double its headcount for such times, but not for the number, for the quality of the people.
You need a well-established niche market to commercially scale up the unique knowledge you’ve gathered so far about deepfake videos. Photo: László Sebestyén
According to Weiszbart, in addition to gaining the right talent and brains, it will be important for the team to be able to continue to work in a focused manner, both on the product and business development side. "There's no time or money pressure on the team right now, they have time to figure out exactly where the story is going."
In a year or two, humanity will win against the covid, and the summer period between the two waves is marked by the euphoria surrounding personal encounters, all indications are that the world is longing for more video.
Just as Zoom , which has become an iconic company of the era and has recently announced a major acquisition, is not falling, so is investor capital flowing unstoppably into video technology.
Let’s watch the videos, even if what they are telling is true, even if it is false.
Weiszbart is still optimistic, according to him, camouflage video detection as a product will be interesting for the market in 3-4 years. But don’t deny, like any early-stage investment, it’s also an “all or nothing” story. If the megatrend they expect strikes, it could have a serious impact not only on Colossyan but on our lives as well.
And Dominik, who is still only 23 years old, and his fellow young founders still have time to experience what it’s like when they dictate to the market - and not the other way around.
Original Post:
By GERGŐ ZSIBORÁS
https://forbes.hu/napi-cimlap/deepfake-szintetikus-media-startup-befektetes-colossyan/