India-based audio app Pocket FM has raised $103 million in Series D funding. Lightspeed Ventures led the round, and Stepstone Group also participated. Tencent and Times Internet are investors in the company. It wants to grow into Europe and Latin America after seeing success in the U.S. market.
This is the first time TechCrunch has heard that the company has raised $196 million in various rounds, putting its value at $750 million.
Last year, TechCrunch said that the company was in talks with Lightspeed to lead the funding round that it revealed today.
How Does The Site Work?
Pocket FM wants to be the “Netflix for audio” around the world by offering audio shows with several short episodes. Users can listen to some shows or series for free, but they have to buy coins to get access to others. Pocket FM has found that the pay-as-you-go plan works better for the company than a subscription-based model that would let users access all content.
This doesn’t make people pay every month. People who want to listen to more material, on the other hand, have to buy coins, which are like buying game items that help you level up.
The company said last month that it was going to put $40 million into Pocket Novel, a writing site that works like Wattpad. Rohan Nayak, co-founder of the company, wrote on LinkedIn last week that since February 20, more than 90,000 writers had signed up for the site. Pocket Novel also makes people buy coins to get to material.
It is possible to buy coins in both apps to unlock material, but they do not currently work together. That means you can’t use coins you got on Pocket FM to get content on Pocket Novel products or Pocket FM content on Pocket Novel products.
Pocket FM also fights with services like Audible in the limited audiobook market by using a similar “pay-to-unlock” model. The company is only selling this item in India through agreements that are already in place.
Numbers Game
Pocket FM is a numbers game that usually works best for people who spend more time on the app. To do this, the audio platform has more than 400,000 episodes and more than 100,000 hours of material in a wide range of genres and languages.
The company’s move into the U.S. in 2021 has been a big source of income. That Pocket FM has made more than $150 million ARR this year, with $100 million ARR coming from the US. The company is in more than one market, but the U.S. and India are its two biggest.
The site has also gotten a lot of use from people in the United States. Around the world, people use the audio app for 115 minutes on average. In the U.S., that number rises to 135 minutes.
More than 250,000 writers have signed up for the Pocket Novel writing site. It has local competitors, such as Pratilipi, which is backed by the Omidyar Network. This is how much money the company wants Pocket Novel to make every year by 2025: $100 million.
GenAI And The Maker Economy Are Both Areas Of Work.
It makes sense that Pocket FM wants to try out features that are based on creative AI. It has already begun trying a tool that will let American writers turn their works into audiobooks. The company is working with Eleven Labs to give writers 50 voices that are driven by AI.
The company also said that its own employees are working on AI-powered tools that will help writers finish their stories faster.
Pocket Novel writers get paid through a revenue share scheme, and the new company gives writers incentives to meet their writing goals. But the platform has a lot of average material because it uses AI tools that often produce output that isn’t reliable or isn’t very good.
Nayak told TechCrunch that a platform’s main job is to get rid of the noise.
“You need to take out the noise and make sure you leave out the good stuff before you give it to people to listen to.” “AI, at least in our case, is more about how to use it to help creators and writers be more productive and efficient,” he said.
Pocket FM says that some writers on the site make more than $3,000 a month, but it didn’t say how much the average writer makes. There isn’t an exclusivity clause in place when artists first sign up for the platform, but the startup said it has deals in place to own the IP.
Plans For Investments And Growth In The Future
On a separate note, the business is already seeking backers for its next round. TechCrunch claimed last week that Abu Dhabi’s sovereign wealth fund ADIA has been in talks with Pocket FM about a possible huge funding round.
The company didn’t directly reply to that news, but it did say that it has gotten a lot of interest from investors.
“When you start to grow, investors become very interested.” “But whether it’s the new round or not depends on how we plan to scale up and on something happening,” Nayak said.
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Nayak also said that the business isn’t making money yet, but it has a high sales margin and is working on growing. The new company has about 800 employees and wants to hire another 500 people around the world.
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