TrueShort: $12 Million to Revolutionize AI Cinema on Mobile

TrueShort Raises $12 Million for Its Mobile AI Films

Nate Tepper, the head of TrueShort, identifies a niche between TikTok and Netflix for high-quality films tailored for smartphones. This new AI film application has successfully raised $12 million from influential investors in Silicon Valley and Hollywood. Notable backers include Khosla Ventures and WndrCo, the company founded by Jeffrey Katzenberg. TrueShort is starting with true crime films and plans to expand into other genres soon.

Prestigious Funding for a New Era of Cinema

TrueShort, which specializes in creating "verticals" — films broken down into episodes of one to three minutes — has attracted a panel of prestigious investors. The initial funding of $12 million was led by Keith Rabois of Khosla Ventures, according to exclusive information obtained by Business Insider. Other participants include Jeffrey Katzenberg's WndrCo, Ravi Nandan of A24, Scott Belsky, founder of Behance, and General Catalyst. The company's founding creative partner is W. Hayden Schwartz, a former executive at Legendary Entertainment.

A Vision Between Netflix and TikTok

Founded last year by serial entrepreneur Nate Tepper, TrueShort aims to fill the gap between Netflix and TikTok. Tepper, who previously launched apps like Humans Anonymous, Set The Set, and UNight, has always dreamed of making a film in Hollywood, but financial constraints held him back. The emergence of low-budget "micro dramas" on mobile platforms like ReelShort and DramaBox revealed a rapid growth opportunity through AI.

Promising Beginnings in True Crime

TrueShort started with true crime series but aims to cover a wide range of genres in the future. Other Hollywood figures are also interested in verticals as traditional production slows down. Film producer Tommy Harper recently launched a similar app called VeYou, following the initiatives of former Miramax CEO Bill Block and Lloyd Braun.

A Growing Market

According to streaming consultancy Owl & Co., vertical film apps could generate $1.4 billion in the U.S. by 2025. Other micro-drama apps are also beginning to incorporate AI characters, receiving mixed feedback from viewers.

Fast and Cost-Effective Production with AI

Tepper launched TrueShort with documentary-style true crime series, believing this format, which combines archival footage and AI characters, would resonate well with audiences. He plans to quickly expand the range of genres as quality improves. The company aims to add 60 filmmakers and editors this year, in addition to the 20 already in place. Thanks to AI, high-quality animation is achievable, and even live-action is possible, according to Tepper.

Reducing Production Costs

One of the major advantages of AI is the reduction in film production costs. TrueShort produces a 20 to 30-minute film each week, using AI tools from companies like Eleven Labs and Midjourney. Thus, a film can be produced for just $1,000 to $3,000, compared to the typical cost of $100,000 to $300,000 for a micro-drama with human actors.

Subscription-Based Business Model

Most current micro-drama apps rely on a subscription model and depend on paid marketing to attract users. Some experts predict a shift towards advertising as users grow tired of subscriptions, and consumption shifts towards apps like TikTok, which already has a large user base. TikTok is recruiting actors for its own micro-dramas after launching a dedicated feed in its app as well as a standalone app, Pine Drama.

A Promising Future for TrueShort

TrueShort generates revenue through its subscriptions, offered at $39.99 per year, $14.99 per month, or $6.99 per week. Tepper claims he does not want to include advertisements and believes the subscription model is working well, with a profit goal of $10 million per year by the end of 2026. Although the company currently relies on paid marketing, Tepper is confident that word-of-mouth will take over as the quality of films improves.

"We don't want to rely on paid advertising indefinitely," he stated.