Microdrama Explosion, upGrad-Unacademy Deal Off, and PadelPark Merger

India’s microdrama boom didn’t begin in India - it began in China, when short-video fatigue collided with failing long-form streaming economics. The space between, 60-120 seconds of high-drama vertical storytelling, exploded into a $7-9.4B market by 2024. India saw the pattern, adapted it faster, and within three years built a $260M ARR category doubling every few months. In entertainment, nothing has compounded this quickly since mobile gaming.

Microdramas fit India’s behavioural rhythm perfectly. Phones are held vertically; attention is fragmented; emotional spikes win over slow-burn plots. OTT demands 40 minutes and a subscription; microdramas demand 60 seconds and ₹10. For much of Bharat, this isn’t “snackable content”, it’s an affordable escape. Over 55% of the audience comes from Tier 2-3 towns, where ₹499 OTT subscriptions feel heavy but ₹10 cliffhangers are frictionless.

China's trajectory shaped the ambition, but India’s tailwinds - cheapest data, vernacular depth, UPI-driven micropayments, and a population raised on serialized drama - made the format explode.

Two audiences drive the flywheel. The “urban whale”, affluent women 25-55, binge romance and revenge arcs, and delivering ARPUs comparable to OTT. Meanwhile Bharat powers scale: ₹20k-₹80k income households buying episodic access, one emotional hit at a time.

The real disruption lies in production economics. A 90-minute web series once cost ₹40-50 lakh and took months. Microdrama studios now use AI-heavy pipelines to create equivalent output in 2-3 weeks for ₹10-12 lakh. Scripts, character models, virtual sets, dubbing, colour, and edits - all compressed into agile, software-like workflows. India’s first fully AI-generated mythological microdrama, Dev Ya Manav, hit 26M views - proof that quality and cost can bend simultaneously.

This cost collapse created industrial scale. Mumbai alone has 550+ microdramas in production. Dashverse raised India’s largest Series A in the space ($13M). Pocket FM crossed ₹1,768 crore in revenue by repurposing audio IP into video. Kuku TV is building a vernacular fortress with near-zero CAC thanks to the Kuku FM funnel.

Monetization is the category’s masterstroke. OTT asks for a subscription upfront. Microdramas lure viewers in with 8-10 free episodes, land the hook, then convert through cliffhangers. Payments happen via coins, bundles, passes - borrowed from gaming psychology. CAC ranges ₹30-100 in mass markets, while LTV sits ₹30-600 annually.

Competition is also accelerating. Pocket FM uses its massive audio library as a low-CAC gateway. Moj leverages 150M+ MAUs for free distribution. MX Player is experimenting via MX Fatafat. The pure-plays - Dashverse, Story TV, Flick TV, Kuku TV - move faster, localize deeper, and optimize production in ways big platforms can’t justify.

By decade’s end, India’s microdrama space could hit $5-10B ARR - outpacing OTT’s early growth curve. It won’t replace long-form streaming, but it will carve out a parallel entertainment economy built entirely around vertical video, emotional velocity, and ₹10 microtransactions. It’s rare for India to sit at the global edge of a new media format - but this time, the cultural curve and the technology curve are aligned.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Ye Kya Hua, Kaise Hua”: upGrad-Unacademy Merger Talks Fall Apart On Valuation Differences

Merger talks between upGrad and Unacademy have fallen apart after the two sides failed to agree on valuation.

One of the people familiar with the discussions said the deal collapsed once negotiations hit a dead end on pricing. Reports indicate Unacademy was seeking a valuation in the $300 Mn to $400 Mn range, a figure that ultimately proved too high to close the acquisition.

Read more here

“Hum Saath Saath Hai”: PadelPark Merges with MS Dhoni’s 7Padel To Scale Turf Sports

PadelPark has merged with 7Padel, backed by cricketing icon MS Dhoni, to build scale in India’s fast-growing turf sports ecosystem.

The combined entity also counts JSW Sports owner Parth Jindal as a backer, with PadelPark having already turned EBITDA positive in FY24 on the back of leasing revenues from its 40-plus courts.

Read more here

“Modi Hai Toh Mumkin Hai”: PM Modi Pushes For Indigenous, Ethical AI Under IndiaAI Mission

Under Narendra Modi’s latest push, the IndiaAI Mission is backing startups like Sarvam, Soket AI, Fractal Analytics and Tech Mahindra Maker’s Lab to build native foundation models rooted in Indian contexts rather than imported datasets.

Selected under the mission’s foundation model pillar, these companies are focused on developing homegrown LLMs that reflect local languages, use cases, and realities.

Read more here

1. Spector.ai has raised ₹58 Cr in a funding round led by IvyCap Ventures, with participation from strategic US-based investors, as it looks to deepen its footprint across industrial AI use cases. The capital will be used to strengthen its core AI stack and scale global deployments.

   Read more here

2. TakeMe2Space has raised ₹42 Cr in a funding round led by Chiratae Ventures, with participation from Artha Venture Fund, SeaFund, and Unicorn India Ventures. The capital will be used to expand its satellite constellation to six spacecraft delivering around 5 kW of in-orbit compute.

   Read more here

3. Aivar has raised ₹41.3 Cr in a seed round led by Sorin Investments, with participation from Bessemer Venture Partners, as it gears up for international expansion. The capital will be used to strengthen delivery capabilities and build reusable AI components.

   Read more here

4. &Done has raised ₹25 Cr in a funding round led by RTP Global, with participation from Suashish, All In Capital, Info Edge Ventures’ Kitty Agarwal, Titan Capital cofounders Kunal Bahl and Rohit Bansal, and Mirae Asset CEO Puneet Kumar. The fresh capital will be used to expand &Done’s retail product portfolio.

   Read more here

5. Varthana Finance has secured a ₹50 Cr loan from WaterEquity to expand water and sanitation infrastructure across affordable private schools in India. The capital will fund clean drinking water systems, sanitation facilities, and hygiene infrastructure.

   Read more here

6. Fabpad has raised an undisclosed seed round led by Inflection Point Ventures, as it looks to widen access to menstrual hygiene products beyond metro markets. The capital will be deployed to scale D2C and marketplace distribution as well as expand offline retail.

   Read more here