Audio platform Pocket FM luggage $103M in funding because it eyes international growth

India-based audio platform Pocket FM has secured $103 million in Sequence D funding led by Lightspeed Ventures with participation from Stepstone Group. The corporate, which counts Tencent and Occasions Web as backers, goals to increase into Europe and Latin America after optimistic ends in the U.S. market.

The corporate has now raised $196 million throughout a number of rounds with a valuation of $750 million, Information World has completely discovered.

Information World reported final yr that the corporate was in talks with Lightspeed to guide the funding spherical that it introduced as we speak.

How does the platform work?

Pocket FM gives audio sequence with a number of brief episodes and goal to change into the “Netflix for audio” globally. Customers can take heed to some sequence or episodes free of charge and unlock others by buying cash. As an alternative of adopting a subscription-based method to let customers entry all content material, Pocket FM has discovered that the pay-as-you-go mannequin is extra appropriate for the corporate.

This doesn’t lock in customers in a cost cycle. But when a person needs to take heed to extra content material they’ve to purchase cash — like shopping for level-up gadgets in a sport.

Final month, the corporate stated that it plans to speculate $40 million into its Wattpad-like writing platform Pocket Novel. Final week, the corporate’s co-founder Rohan Nayak posted on LinkedIn that greater than 90,000 writers had signed up on the platform since February 20. Pocket Novel additionally pushes customers to purchase cash to unlock content material.

Whereas each apps have a coin-buying mechanism to unlock content material, there is no such thing as a integration between them in the mean time. Which means you may’t use the cash you obtain on Pocket FM to unlock content material Pocket Novel merchandise and vice versa.

Pocket FM additionally has a restricted audiobook vertical the place it competes with the likes of Audible with the same pay-to-unlock technique. The corporate is operating this product solely in India with current partnerships.

Numbers sport

Pocket FM sometimes optimizes for customers spending extra time on the platform. To that finish, the audio platform has greater than 100,000+ hours of content material and over 400,000 episodes throughout genres and languages.

The corporate’s U.S. growth in 2021 has proved to be a significant income driver. It stated that Pocket FM has crossed $150 million ARR this yr — with a $100 million ARR contribution from the U.S. The corporate is current in different markets, but it surely counts the U.S. and India as its largest markets.

The platform has additionally seen a excessive degree of engagement from its U.S. person base. Whereas globally, customers are spending 115 minutes on the audio platform, that common goes as much as 135 minutes within the U.S.

The Pocket Novel writing platform, which has native rivals like Omidyar Community-backed Pratilipi, has greater than 250,000 writers onboard. The corporate needs Pocket Novel to clock a $100 million in Annualized Income Run Charge (ARR) by 2025.

Efforts in GenAI and the creator financial system

It’s not stunning that Pocket FM is eager to check out generative AI-based options. It has already began testing a device for writers within the U.S. to transform their writings into audiobooks. The corporate is working with Eleven Labs to supply writers with an array of fifty AI-powered voices.

The startup famous that it is usually internally engaged on AI-powered instruments that can assist creators write their tales sooner.

Whereas Pocket Novel writers earn by a income share program, the startup gives incentives for hitting writing targets. However utilizing AI instruments that usually generate unreliable or low-quality output means there’s quite a lot of mediocre content material on the platform.

Nayak instructed Information World that primarily it’s a platform’s job to filter out the noise.

“You could filter out the noise and be sure to filter out the high-quality content material which you then make accessible to listeners. The best way we see AI at the least in our context, it’s extra about how you employ AI to unlock productiveness and effectivity features for creators for writers,” he stated.

Pocket FM says that some writers on the platform earn greater than $3,000 monthly but it surely didn’t give details about common total revenue. The corporate doesn’t implement an exclusivity clause when creators are onboarding the platform, however the startup stated that it has some offers in place to personal the IP.

Future plans for funding and growth

Individually, the corporate is already speaking to buyers for its subsequent spherical. Abu Dhabi’s sovereign wealth fund ADIA has held talks with Pocket FM for a possible mega funding spherical, Information World reported final week.

The corporate didn’t instantly reply to that improvement however stated it has acquired vital investor curiosity.

“As you’re scaling you see quite a lot of investor curiosity typically. However whether or not it’s the new spherical or not is determined by form of our scaling plan and is determined by one thing materializing,” Nayak stated.

Nayak additionally talked about that the corporate just isn’t worthwhile but, but it surely has a excessive gross margin and is specializing in scaling. The startup has round 800 folks and plans so as to add 500 personnel throughout the globe.