Companion Labs raises $2.5 million led by Peak XV's Surge programme

Companion Labs, a consumer AI startup building interactive, entertainment-led experiences, has raised $2.5 million in a funding round led by Peak XV Partners’ early-stage accelerator programme, Surge.

The round also saw participation from All In Capital, Untitled Ventures, DeVC and a clutch of angel investors.

The company said it will use the fresh capital to accelerate product development, strengthen its AI capabilities and refine its offering as it works towards achieving product-market fit.


"What we have seen over the last decade is that the digital entertainment experience has not evolved meaningfully. With technologies such as AI, the entire stack is now being reset," cofounder Akshay Jhanwar told ET.

Founded by Jhanwar and Ajit Pol, the startup enables users to explore alternate lives, careers and ambitions through AI-driven storytelling. Currently in beta, the app offers about 25 interactive stories where users play the main character and AI powers the supporting roles.

Jhanwar said the app is expected to roll out in the first week of April.

The fundraise comes at a time when audiences are increasingly gravitating towards interactive formats of content consumption, with shorter formats gaining traction amid shrinking attention spans.

"We want to build a product where about 50% of users are retained after six months. If we get there, scaling becomes straightforward," he said, adding that the stories are currently written by human creators.

The startup is focused on vernacular languages including Tamil, Telugu, Gujarati, Punjabi, Marathi and Bengali, and targets young, digitally active users across India.

"This is a new form of entertainment. Over the next five to ten years, we expect 150-200 million people to consume this format two to three times a week," Jhanwar said.