Latent Technology Raises €7M Seed Funding To AI-Powered Game Animation

The round was co-led by AlbionVC and Spark Capital and saw participation from Root Ventures and Alumni Ventures, marks a significant milestone as the company prepares to scale its breakthrough animation technology.

Jorge del Val, Co-founder and CEO of Latent Technology, said: “AI gives us the opportunity to transform not only how developers create games, but also how players experience them. While many companies are using AI to optimise existing workflows, we’re focused on enabling something fundamentally new – emergent, interactive animation that reacts in real time. Our aim is to evolve the animation paradigm towards emergent physical behaviors, opening up new, creative possibilities for developers and dynamic experiences for players.”

By blending neural networks with physics characters in games can now move and react naturally in real time creating a more interactive and lifelike experience.

Latent says this innovation is becoming increasingly important as game development costs continue to rise. Budgets for AAA games are growing at an estimated 8% per year through 2028, outpacing revenue and pushing studios to find more cost-effective, high-quality solutions.

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Latent’s animation system is powered by ‘Phoenix’ its own generative physics animation model currently in development. Unlike traditional animations that are manually created or pre-rendered Phoenix allows for real-time, environment-aware character behavior.

This means characters and environments can react instantly and naturally to player actions and changing gameplay, making games feel more dynamic and interactive—no more relying on fixed, pre-scripted sequences.

Del Val added, “Our technology allows us to prototype rapidly while delivering experiences that were not possible before. We aim to stay close to the development workflow by shipping real, playable demos that showcase our technology in action.”

The new investment will help Latent Technology continue building its platform, especially the ‘Latent Behaviour Engine.’ This tool allows game developers to easily create and use real-time, physics-based character behaviors in their games.

Latent is currently testing the technology in a closed beta with selected studios and plans to release two more tech demos later this year to show how it works and improve the tools further.

Sebastian Hunte, Investor AlbionVC said: “Latent’s technology positions it to become core infrastructure for the future of game development—powering next-gen interactive experiences through real-time, generative animation. Just as LLMs have revolutionised content creation, Latent is laying the foundation for a similar leap in animation. With strong early traction and a deeply technical team we’re thrilled to support their journey.”

About Latent Technology

Founded in 2022, Latent Technology helps game developers create real-time, dynamic animations with minimal effort. Unlike traditional game animations that use fixed, pre-set movements, Latent’s Generative Physics Animation offers a smarter alternative.