A new fundraising round of over $80 million is almost inevitable for audio entertainment startup Pocket FM, according to the sources who spoke with TechCrunch. The company has already exceeded $160 million in annualized revenue rate.
According to sources who asked to remain anonymous because the information is private, Lightspeed, an existing investor in Pocket FM, is in the final stages of negotiations to lead the investment round into the Indian business. As per one of the sources, the investment giant is considering funding the transaction from its U.S. and India branches. According to two of the insiders, the startup is valued at about $800 million at this point in the discussions.
The fundraising discussions come after the Indian business’s rapid revenue growth. The startup provides serialized fiction and non-fiction content in areas like motivation, self-help, and romance. Two individuals stated that its current ARR is over $160 million, a six-to seven-fold rise from a year earlier. By the end of 2023, Pocket FM aimed to have an ARR of $100 million.
One of the sources claims that the startup’s entry into the U.S. market and provision of a pay-as-you-go, non-subscription service have been particularly effective.
According to venture intelligence platform Tracxn, Pocket FM, which has Tencent and Times Internet as backers, has raised roughly $93 million. The company uses a freemium business model, allowing users to pay only for the content they want rather than the entire library.
With a price for extra material, the startup has been able to offer free access to episodes every 24 hours thanks to this strategy. The network has been using a micro-transaction model since the beginning of 2022, which allows users to buy coins in their local currency and redeem them for episodes that exceed the free quota. Another person who knows the situation claims that listeners spend an average of more than 110 minutes daily on the platform.
Both Lightspeed and Pocket FM declined to comment on Tuesday night. Some of the financial information was previously revealed by the Indian website Entrackr.
