(Reuters) -Hedra, an AI startup that helps businesses generate lifelike videos, said it has raised $32 million in a funding round led by Andreessen Horowitz's Infrastructure fund to expand operations and deepen its reach among marketers.

The Series A fundraise valued the company at $200 million, according to a source involved in the deal.

The round brings its total raised funds to $43 million, Hedra said on Thursday.

The AI video space has boomed in the past year, with ChatGPT-maker OpenAI's Sora and Runway's Gen-2 among the models racing to dominate the nascent industry. However, doubts remain over their scalability due to high computing costs and their ability to avoid the "uncanny valley", where near-realistic digital characters trigger discomfort in some viewers.

Founded in 2021, Hedra is hoping to stand out with its Character-3 foundation model that blends text, image and audio to create lifelike digital characters. Businesses can use the technology to create animated mascots or professional spokespersons for their brands.

"Getting over the uncanny valley of compelling performance is the hardest frontier in video, and with our Character-3 foundation model, we're devoted to crossing it," said founder and CEO Michael Lingelbach, a former stage actor.

Hedra currently employs 20 people and plans to triple its workforce to support its growing operations.

The round also saw participation from existing investors, including a16z speedrun, Abstract and Index Ventures.