India-based audio platform Pocket FM has recently announced a major milestone – the company has secured a whopping $103 million in Series D funding. Led by Lightspeed Ventures and with participation from Stepstone Group, Pocket FM is now valued at $750 million. This marks a significant achievement for the company, which has already raised $196 million across multiple funding rounds.
TechCrunch has exclusively learned that the company has big plans for this investment – Pocket FM aims to expand its reach into Europe and Latin America, building on its already successful presence in the U.S. market. The company’s existing backers, which include Tencent and Times Internet, have shown their confidence in this global expansion strategy.
When asked about the company’s progress and ambitions, Pocket FM’s co-founder Rohan Nayak shared the following:
“Our goal is to become the ‘Netflix for audio’ globally. Pocket FM offers a plethora of audio series, with each episode being short and engaging. Our unique model allows users to listen to some episodes for free, while unlocking others by purchasing coins. We have found that a ‘pay-as-you-go’ approach works better for us as compared to a subscription-based model.”
This allows users to choose which content they want to consume, rather than being tied to a recurring payment cycle. If a user decides to listen to more episodes, they can simply purchase coins, similar to buying level-up items in a game.
Last month, Pocket FM announced its plans to invest $40 million into its writing platform, Pocket Novel. This platform, similar to Wattpad, allows aspiring writers to showcase their work and receive recognition for their talent. Less than a week after this announcement, Nayak shared on LinkedIn that over 90,000 writers had already signed up on the platform since February 20. In fact, Pocket Novel also utilizes a coin-buying mechanism to unlock content, creating a unique synergy between the two platforms.
While both apps use this approach, there is currently no integration between them. This means that coins purchased on Pocket FM cannot be used to unlock content on Pocket Novel and vice versa.
In addition to Pocket Novel, Pocket FM also has a limited audiobook section which competes with big players like Audible. Using a similar pay-to-unlock strategy, Pocket FM offers this service exclusively in India through partnerships with existing companies.
Numbers Game
The primary focus for Pocket FM is to keep users engaged on their platform. To achieve this, the company boasts an impressive content library, with over 100,000 hours of content and over 400,000 episodes spanning different genres and languages.
The company’s expansion into the U.S. market in 2021 has proven to be a major revenue driver. With $150 million ARR this year, Pocket FM has received a major boost from its U.S. user base, contributing $100 million ARR. While the company is present in other markets as well, the U.S. and India are its two biggest markets.
The company has also seen a high level of engagement from its U.S. users, with an average listening time of 135 minutes, compared to 115 minutes globally.
The writing platform, Pocket Novel, has already attracted over 250,000 writers and the company has ambitious plans for its future. Nayak shared that their goal is to achieve $100 million ARR by 2025.
Efforts in GenAI and the Creator Economy
Pocket FM is not shy to explore new technologies and has already begun testing generative AI-based features. One of these features is a tool for writers in the U.S. to convert their written work into audiobooks. Pocket FM has partnered with Eleven Labs to provide writers with an array of 50 AI-powered voices.
The company is also working on other AI-powered tools to help creators write their stories more efficiently. When questioned about the potential impact of AI-generated content, Nayak shared his views:
“Our focus is on ensuring that our platform filters out the noise and only presents high-quality content to our listeners. For us, AI is about using it to increase productivity and efficiency for our creators and writers.”
Pocket FM claims that some writers on their platform earn more than $3,000 per month. While the company does not enforce exclusivity, they do have some deals in place to retain the intellectual property rights of their creators.
Future Plans for Investment and Expansion
As the company continues to scale, it is already in talks with investors for its next funding round. Last week, reports emerged that Pocket FM was in discussion with Abu Dhabi’s sovereign wealth fund ADIA for a potential mega funding round. Nayak did not confirm these reports but shared that the company has received significant investor interest. When asked about their profitability, Nayak mentioned that the company is not yet profitable but has a strong gross margin. The focus for Pocket FM currently is on scaling, with plans to add 500 employees globally to its current team of 800.
With its unique approach to audio content and ambitious growth plans, Pocket FM is well on its way to becoming a leading player in the industry. As they continue to innovate and expand, Pocket FM is definitely a company to watch out for.
Stay tuned for more updates from Pocket FM!
