Mainstream audio platforms often offer limited choices, leaving audiences craving for more personalized and diverse experiences. Pocket FM set out on a mission to transform the audio entertainment landscape, offering a platform that empowered creators to share their stories, poems, and narratives in their native languages. By providing a space for localized and diverse content, Pocket FM ensured that listeners could immerse themselves in stories that resonated with their cultural backgrounds.
With plans for expansion, Pocket FM recently raised $103 million in its Series D funding led by Lightspeed Ventures, with participation from Stepstone Group. Some of the other notable investors in the company are Goodwater Capital, Tanglin Venture Partners, Naver, Times Internet, and Tencent.
This infusion will help Pocket FM make plans for further growth and R&D as the company aims to strengthen its foothold in the US market while venturing into Europe and Latin America. Additionally, the platform is planning to make additions to its content library and create a strong IP playbook for its users.
Moreover, the funding has helped Pocket FM increase its valuation to approximately $750 million, a significant leap from its valuation of $390 million during its previous Series C funding of $65 million in March 2022.
“Our focus remains on tapping into unique and exclusive stories to solidify our leadership in this emerging category,” Pocket FM’s co-founder and chief executive officer Rohan Nayak said in a statement in March 2022.
Pocket FM Innovative Audio Experience
Founded by Prateek Dixit, Rohan Nayak and Nishanth KS, Pocket FM offers an audio series with short episodes, where users can listen to some for free and unlock others by buying coins. Instead of a subscription model like Netflix or Spotify, Pocket FM uses a pay-as-you-go system, which they’ve found works better for them. While this means users don’t subscribe regularly, it encourages repeat purchases if users want more episodes in a series, they buy coins, similar to leveling up in a game.
“We want to make Pocket FM the Netflix of audio OTT platforms, releasing bingeable long-format series to keep listeners hooked,” says Rohan Nayak, CEO and co-founder, of Pocket FM.
The company is focusing on supporting creators, and aims to invest $40 million in its writing platform, Pocket Novel. They’ve attracted over 90,000 writers since February 20. Pocket Novel also uses a coin system for unlocking content. Currently, there’s no connection between the coins used in Pocket FM and Pocket Novel.
Pocket FM also offers a limited audiobook section, similar to Audible, with a pay-to-unlock approach, available only in India through partnerships. They aim to keep users engaged, boasting over 100,000 hours of content and 400,000 episodes across genres and languages.
In the US, where they launched in 2021, Pocket FM has seen significant revenue growth, contributing $100 million to their total of $150 million in Annual Recurring Revenue (ARR). While they operate in other markets, the US and India are their primary focuses. According to the founders, the US user base spends an average of 135 minutes on the platform. Meanwhile, Pocket Novel, their writing platform, has over 250,000 writers and aims to hit $100 million ARR by 2025, facing competition from platforms like Pratilipi.
“Pocket FM has seen a hockey-stick growth trajectory over the past few months, not only limited to listeners’ and creator growth but also an exponential rise in revenue. Currently, listeners are spending an average of over 100 minutes every day, while the total monthly audio streaming on the app counts to over four billion minutes,” Nishanth (also COO) shared.
Future Plans
Pocket FM is diving into the world of generative AI, exploring new features for its platform. In the US, they have started testing a tool that helps writers turn their written work into audiobooks. Teaming up with Eleven Labs, Pocket FM offers writers a choice of 50 AI-powered voices to bring their stories to life. Internally, the company is also developing AI tools to assist creators in writing faster and more efficiently.
While writers on Pocket Novel earn through sharing revenue, Pocket FM motivates them further by offering incentives for meeting writing targets. However, the use of AI tools, which can sometimes produce subpar content, has led to a mix of quality on the platform. Pocket FM acknowledges the need to sift through this content to ensure a high-quality user experience.
Looking forward, the company is already in talks with investors for its next funding round. There have been discussions with Abu Dhabi’s sovereign wealth fund ADIA for potential significant funding. Although the company hasn’t directly confirmed this, they have noted considerable interest from investors.
While the platform is not yet profitable, they are focusing on growth, with a high gross margin. Currently, the startup employs around 800 people and plans to expand its workforce by adding 500 personnel globally.
“Our AI and ML enabled technologies, which are unique for Pocket FM, have helped us to understand listeners’ data insights and simplify things, helping us cut expenses elsewhere. It has accentuated advanced, personalised content recommendation engines to drive higher user engagement and retention,” Dixit adds.
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