AI entertainment startup Dashverse raises $13 million funding led by Peak XV Partners

CEO Narain told Moneycontrol that the company’s focus is on DashReels and Frameo.AI. "We think video is a much bigger market and all our energy should go there. We are a small team at the moment and we want to focus on one thing at a time," he said.

A small team has been allocated to maintain Dashtoon, with hopes to revive the comics app in the future. "If you become successful and big enough then...you would want to run a portfolio of brands, but right now we are completely committed to DashReels and Frameo.AI," he said.

The fundraise comes at a time when micro dramas, short serialised dramas of one to two minutes designed for mobile viewing, are rapidly gaining popularity in India. This surge has spurred the launch of more than a dozen apps from companies including Kuku FM, Pocket FM, and ShareChat, aiming to capitalise on the trend.

Dashverse claims its DashReels app has surpassed 5 million downloads within a month of launch.

Frameo.AI, still in beta, allows creators to produce high-quality micro drama series.

Where will the money go?

Narain said 70 percent of the capital raised will go into developing the company's core AI technology and product, including investments in GPUs, model fine-tuning and other AI training processes.

"The problem with generative AI is the predictability of the model itself. It is built on probability and not absolute predictability, so the challenge is how to control the model and get what you want," he said.

Dashverse's AI engine tackles these issues by offering composition control and maintaining consistency in style and character, he said. For example, it lets creators specify exactly how the camera should be positioned and the precise view to capture while ensuring that character does not change in every AI generation.

"We want to be a two-sided marketplace for creators and consumers. We don't want to be a studio or produce content in-house," he said.

Narain said micro dramas have a "strong product market fit" but to build a business, the fundamentals need to work out, which means producing good content at high velocity.

"Our approach is to build a creative community and provide AI tools that will enable the content velocity on the product," he said.

“The creator economy is undergoing a seismic shift driven by generative AI, and Dashverse is at the very heart of this transformation,” said Abhishek Mohan, Principal at Peak XV. "Their unique approach, combining proprietary AI with a deep understanding of storytelling and creator workflows, sets them apart."

Aakash Kumar, managing director at Z47, said Dashverse is building a "powerful engine for mobile-first, AI-native storytelling, at a pace that matches how audiences consume today."

Naman Lahoty, partner at Stellaris Venture Partners, said the company has "built one of the finest applied-AI teams in the country".

"Doubling down on our investment reflects our deep conviction in their ability to build a global, category-defining company in this space." The firm had earlier raised $5 million in seed funding from Matrix Partners India (now Z47) and Stellaris Venture Partners.

Subscriptions vs micropayments

Dashverse is taking the subscription route for DashReels rather than the micropayment model used by Dashtoon. The app charges Rs 399 for a three-month subscription, which offers unlimited, ad-free access to shows.

Narain said subscriptions fit microdrama apps better than micropayments because the bite-sized videos make it difficult for users to pay after each episode ends.

"Micropayments work better when your content has some length, so if one show you are consuming is really long, you have those sticky users who continue to pay," he said.

In terms of genres, fantasy is a key focus area for DashReels. "We believe the true leverage of AI comes in when you are able to make big productions at the same cost, so we indexed on it," Narain said.

The company has licensed a range of micro dramas from across the world for distribution as part of its launch efforts. It plans to set up a revenue-sharing model with creators, similar to YouTube, Narain said.