Startup Daily- November 28, 20252 MIN READ

Source: DALL-E

Indian online gaming platform Zupee has acquired Sydney AI startup Nucanon in a deal reportedly worth $5 million.

Nucanon began life as Stori in 2022, with pre-Seed funding from Antler and high profile US investor Jason Calacanis via his LAUNCH Fund.

The startup rebranded in 2023 when it raised $500,000 in a Seed round led by Skalata Ventures. Other investors include Outlier Ventures, Paperclip Partners, and outgoing Sydney FC CEO Mark Aubrey.

The acquisition, earlier this month, comes are Zupee shed 30% of its workforce, around 170 employees, in September, after the Indian government introduced new laws banning all money-based online games, forcing the platform to dump many of its product offerings.

Nucanon is an online gaming content generation platform and post-acquisition, the founding team is relocating to India to run product innovation at Zupee’s HQ.

Zupee CEO Dilsher Singh Malhi said the deal will add to the company’s plan to build the world’s most advanced platform for interactive story entertainment.

“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 said.

Nucanon CEO Nilushanan Kulasingham said player agency in a compelling story is “the holy grail of interactive entertainment”

This is the challenge that has stumped the industry for decades, and it’s the one we were founded to solve,” he 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.”

After losing its money-based online games, Zuppee is betting on interactive storytelling as central to its growth strategy, placing an Australia-born startup with founders of Indian heritage at its core to engage fans, alongside extending a game’s lifespan for its creators.