Pocket FM’s New Funding Round Likely to Catapult It Into Unicorn Club at $1.2 Billion Valuation
- ByStartupStory | March 22, 2024
Pocket FM, a burgeoning online audio streaming platform, appears poised to ascend to the ranks of unicorn startups, with an anticipated valuation of $1.2 billion in its upcoming funding round. According to sources close to the matter, the company is in advanced discussions with the Abu Dhabi Investment Authority (ADIA) for its latest funding, which is expected to elevate its valuation significantly.
The latest round of funding follows Pocket FM’s recent announcement of securing $103 million in equity funding, with existing investors Lightspeed Ventures and the Stepstone Group leading the charge. This injection of capital placed the valuation of the Bengaluru-based startup at $750 million. Notable backers of Pocket FM include Tencent, Tanglin Venture Partners, Bennett Coleman & Company Ltd (BCCL), and Times Internet.
The proposed ADIA-led funding round is anticipated to include a secondary sale of shares by existing investors, potentially amounting to $100 million. Details of the deal are still being finalized, according to insiders familiar with the negotiations.
In a statement regarding the ongoing discussions, a person knowledgeable about Pocket FM’s business remarked, “The talks are still ongoing, but it should close at around $1.2 billion valuations… There are few assets growing at a good pace at $150 million of annual recurring revenue. Their (Pocket FM’s) cost of production is low in India and they generate 70% of their revenues from overseas.”
Despite the prevailing challenges in the funding landscape, this prospective investment round holds significant promise. In 2024, only two new unicorns have emerged in India thus far: Krutrim AI, an artificial intelligence firm led by Bhavish Aggarwal, and Perfios, a B2B fintech company.
Pocket FM distinguishes itself in the competitive audio entertainment arena by offering audiobooks and serialized content across various genres. Unlike its counterparts, the platform relies on micropayments rather than subscriptions for monetization. Users can enjoy a set number of free episodes daily before opting to purchase in-app ‘coins’ to unlock additional content.
Speaking of its user base and revenue model, Pocket FM boasts over 130 million registered users, with a substantial portion hailing from the US. The US user base contributes significantly to its revenue, surpassing $100 million in annual recurring revenue (ARR). The company’s global ARR exceeds $150 million, with a quarterly revenue growth rate of 57%.
In addition to its presence in India and the US, Pocket FM is eyeing expansion into Latin American and European markets. The platform witnessed over 20 million transactions in 2023, underscoring its growing popularity and financial viability.
Among its standout shows, ‘Insta Millionaire,’ ‘Saving Nora,’ and ‘The Return’ have emerged as major hits, each generating revenue exceeding Rs 100 crore. Furthermore, nearly 15 other audio series have crossed the $1 million revenue mark.
Comparatively, competitors such as Kuku FM rely on subscription-based models, while streaming giants like Spotify and Audible offer various pricing tiers for access to their content libraries.
A spokesperson for Pocket FM refrained from commenting on the latest developments but acknowledged the company’s ongoing discussions with multiple investors to facilitate its expansion plans. ADIA declined to provide a statement regarding the funding talks. As reported by ET.
TechCrunch initially reported ADIA’s interest in funding Pocket FM, signaling growing investor interest in the burgeoning audio streaming market.
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