Zupee Laid Off All Staff in October; AI Pivot Was Cover, Sources Say

Zupee, the Delhi NCR gaming startup that raised more than $120 Mn, laid off its entire workforce of 80-100 employees in October, according to sources cited by Inc42. The October 16 announcement of a pivot to artificial intelligence was, in the words of one source, a public relations exercise rather than a business plan.

"There was no AI plan. It was a damage control exercise to hide the fact that Zupee was winding down its operations. Currently, they have no employees left, barring 3-4 who are working with the founders," the sources told Inc42. That sentence settles the question of what the pivot amounted to.

What did the October announcement actually contain?

On October 16, Zupee said it would exit the gaming business and build AI-led ventures for Indian consumers. The company claimed it would leverage its experience of serving more than 200 Mn users. It did not disclose what the new products would be. A pivot without a product name invites a certain skepticism. That skepticism now appears warranted.

Severance has been paid to the affected employees, covering them until January 2027, the sources said. Inc42 reached out to Zupee for comment and received no response.

The October cuts were the third and final round of layoffs. Roughly ten months earlier, the startup sacked around 200 employees as it turned toward short video content. Before that, it cut nearly 170. At its peak, Zupee employed close to 500 people. The arithmetic is blunt: from 500 to four.

Which businesses have already closed?

The restructuring in October shut down more than the games. Zupee also closed:

• NeoAstro, its astrology platform
• Zupee Studio, its microdrama venture

The microdrama business had been part of a diversification push. Zupee was in advanced discussions to acquire Vertical TV, a microdrama startup. The deal eventually fell through, the sources said, though Inc42 could not independently determine why.

Founded in 2018 by Dilsher Singh Malhi and Siddhant Saurabh, Zupee built its business on mobile versions of traditional Indian games: Ludo, Snakes and Ladders and Carrom. Its investors include Z47, Orios Venture Partners, Nepean Capital, WestCap Group, Tomales Bay Capital and AJ Capital.

What happens to the $120 Mn?

The central question now is the cash. With the gaming business discontinued and the consumer ventures closed, the status of Zupee's remaining reserves, assets and liabilities is unclear. Inc42 contacted investors, including Z47 Partners and Nepean Capital, asking three things: whether they were informed of the shutdown and layoffs, whether the AI pivot was presented to them as genuine strategy, and whether management has begun discussions on liquidation or recovery of unutilised capital.

None of the investors responded.

For a company that raised close to $120 Mn and claimed a user base above 200 Mn, the reversal is complete. The exit from gaming followed the real-money gaming ban that pushed the company out of its core business. The pattern is familiar: a regulatory shock, a diversification that arrives too late, and an AI announcement that serves as an exit letter written in the industry's current preferred dialect.

Unless the founders produce an actual AI product, the next announcement from Zupee is more likely to concern liquidation than a launch.