Gaming and entertainment platform Zupee announced on November 3 its acquisition of Australian artificial intelligence (AI) startup Nucanon to create a new AI-powered interactive storytelling vertical.
The acquisition comes months after the company launched Zupee Studio, a short-form content platform, in September as part of efforts to diversify its operations following the government's blanket ban on real-money games (RMG).
Zupee Studio currently offers bite-sized drama series to the platform’s 200 million registered users. The company also recently announced its entry into esports, with plans to reimagine traditional Indian games such as Ludo, Carrom, and Chess as global competitive formats.
"For decades, we've been trapped between two worlds: the emotional depth of cinema and the agency of games. With Nucanon we want to crack something fundamental — which is not just generating content but understanding narrative causality,” said Zupee founder Dilsher Singh Malhi.
"We believe the Pixar of the next century won’t emerge through traditional film or animation, but rather through interactive mix of Videos and Games. And we're going to build it from India for the world," he added.
What does Nucanon do?
Sydney-based Nucanon, which was previously known as Stori, enables creators to design interactive and immersive narrative experiences for games and digital worlds.
Founded by Nilushanan “Nilu” Kulasingham and Brijesh Trivedi, the startup was backed by Skalata Ventures, Antler, Outlier Ventures, Paperclip Partners, Jason Calacanis’s Launch Fund, Born Ready Ventures (Futureverse), and Sydney FC CEO Mark Aubrey. Nucanon was also part of the AWS Generative AI Accelerator programme.
"The holy grail of interactive entertainment is true player agency within a compelling story. This is the challenge that has stumped the industry for decades, and it's the one we were founded to solve," said Kulasingham.
How will Nucanon acquisition help Zupee?
Following this acquisition, Nucanon's founding team will lead product innovation from Zupee’s India headquarters. The startup's technology will serve as the foundation of Zupee’s new interactive storytelling vertical, which will combine its scale in gaming and entertainment with AI and creative design.
Zupee stated that it aims to build an ecosystem that enables creators to develop branching narratives, dynamic characters, and AI-driven worlds that engages audiences at scale.
The company is also expanding its team across product, technology and design for this initiative, it said.
"Our goal is to build an AI that doesn't just generate text, it understands the story. With Zupee's backing, we now have the resources to take on this challenge at scale," Kulasingham added.
Founded by Malhi and Siddhant Saurabh in 2018, Zupee was last valued at $600 million when it raised a $102 million funding round in January 2022. The company has raised a total of over $121 million to date and counts WestCap Group, Tomales Bay Capital, Nepean Capital, AJ Capital, Z47 (previously Matrix Partners India), and Orios Venture Partners among its investors.
Zupee focuses on board games such as Ludo, Snakes and Ladders, and Carrom. Following the RMG ban, the startup had stated plans of expanding its range of online social games on an ad-supported basis.
The firm also recently introduced a paid subscription service called Zupee Plus, offering subscribers ad-free games, unlimited access to shows, early access to new games, and premium in-app features.
India’s gaming and interactive media segment is projected to reach $7.8 billion by FY30, more than tripling from $2.4 billion in FY25, according to a recent report by US-based gaming and interactive media venture capital firm Bitkraft Ventures and consulting firm Redseer Strategy Consultants.
The growth is being fueled by the country’s rapidly expanding youth user base, the rise of nano-transactions, high smartphone engagement, and a shift in consumer behavior toward interactive and personalized content, it said.
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