How Tencent-backed audio streaming startup Pocket FM rode the pandemic to hit 2B monthly listening minutes
In the last 15-18 months, India has witnessed a definite boom in audio consumption across formats such as podcasts, audiobooks, original audio series, and talk shows.
There were over 150 million daily listeners of audio content in 2020, which is expected to cross 176 million by 2023, as per industry estimates.
Audio OTT got a boost in the pandemic, mirroring the overall growth of streaming platforms, with DAUs of audio apps going up by 3-4X.
The rise of audio platforms has been brought about by increased smartphone penetration across rural and urban India, low-cost mobile data enabled by Jio, and the growing availability of on-demand audio content in local languages.
Pocket FM, which launched in September 2018 when audio was almost a “non-existent category”, has been one of THE defining startups in this sector.
The Gurugram-based startup was founded by Rohan Nayak, Nishanth Srinivas, and Prateek Dixit — all of whom had built and scaled mobile-based content products during their past stints at Paytm, JioSaavn, Flipkart, and Grofers.
Rohan Nayak, Co-founder and CEO, Pocket FM
What Pocket FM solves
Co-founder and CEO Rohan tells YourStory, “While running mobile-based content products for over six years, it became evident to us that audio would be the next content frontier. Audio storytelling would become a mainstream format for sharing knowledge and experiences. A lot of content creators wanted to reach out to wider audiences but could not because of a format gap. That’s what we wanted to solve.”
The audio-sharing platform offers a selection of 10,000+ audiobooks, podcasts, radio shows, and user-generated spoken word content in Hindi, Bengali, and Marathi, with eight more languages coming up.
Pocket FM currently has over 100,000 hours of exclusive audio programming across genres such as crime, horror, romance, self-help, astrology, biography, etc.
It also streams radio stations, and allows listeners to record their own audio content, add voice effects, sound filters, and music, and share it with the community.
Rohan shares, “Initially, there was a classic chicken-and-egg problem. There was hardly any content in the audio ecosystem. We realised it was best to locate content creators who might already have a pre-existing audio audience. We found some creators on YouTube, who were repackaging their audio content as videos. We onboarded them, which helped us kickstart our platform.”
Growth story: 1 Cr installs and 2 Bn minutes
Until early 2020, Pocket FM had garnered 10,000-odd installs in 18 months. The pandemic-led lockdown brought about meteoric growth.
Pocket FM went from 10,000 to 1 crore downloads, and became the #1 app in the ‘Music & Audio’ category on Google Play Store in May. “[It is] a big testament to the potential and scale of Audio OTT in India,” Co-founder and CPO Nishanth Srinivas wrote on Twitter.
Prior to that in February, it hit a milestone of 1 billion minutes streamed per month, which has further increased to 2 billion in June. The average engagement time has also doubled from 50-60 minutes (pre-pandemic) to 110 minutes now.
Fiction is the top vertical on the Pocket FM app. Other popular content categories are self-help, motivation, education, and entertainment.
Pocket FM went from 10,000 to 1 crore app downloads in a year
Rohan says, “Audio is a very intuitive and frictionless medium that offers companionship. Audio streaming is not just an entertainment option. People have reconnected with their listening habits during the pandemic, and this will pave the way for the adoption of audio as a mainstream content format in India.”
The startup claims that it has grown 5X in the last 6-7 months alone. It has 20 million registered users today, compared to 3-4 million in November 2020. Pocket FM hit an ARR of $1.3 million in March, showing signs of product-market fit (PMF).
“We have always believed that PMF alone isn't enough. Our continuous growth experiments helped us find a strong product-channel fit too. We did countless experiments on the product and the content side to understand how users are behaving with different content formats and recommendations,” says the founder.
Pocket FM’s ‘wait and listen’ subscription model lets users access a few episodes of a title for free before giving them the option to upgrade. The app has crossed 10 million MAUs and 100,000 paying subscribers, and is growing at a monthly rate of 30 percent. “Pocket FM is an open platform and anyone can come and create their own audio show. The key incentive for early creators was social capital,” Rohan states.
Funding and future roadmap
Last October, Tencent Holdings led a $5.6 million (Rs 41 crore) Series A round in Pocket FM through its Amsterdam-based unit Tencent Cloud Europe. (The deal was struck in April before the government’s China ban was announced.)
Lightspeed India and Times Internet also participated in the round, which increased Pocket FM’s valuation by more than 6X. Prior to this, in 2018, it had raised a seed round of Rs 4.61 crore from Lightspeed Venture Partners and Brand Capital.
Pocket FM also raised $24,000 from angel investor Haresh Chawla in February 2021.
“We’re figuring out various growth channels to scale fast. We are an experimentation-driven company and are trying out a multi-modal business model, including subscription, ads, micro payments, and content licensing. Audio needs continuous innovation across product and content to accelerate the adoption.”
Pocket FM wants to reach 50 million users and 6 billion monthly streaming minutes by the end of 2021.“Our investors have seen the growth of content platforms closely. They have helped us navigate our journey from 0 to 1 and now from 1 to N,” says the co-founder.
The vernacular audio streaming space in India has been dominated by Bengaluru-based Pratilipi, which raised a Series C round from Tencent last year.
Other venture-backed audio streaming startups, including KuKu FM, Awaaz, Headphone, Khabri, and so on, are also picking up speed. Then, there are localised India-first apps of audiobook giants Audible (Suno) and Storytel (Storibites).
How does Pocket FM plan to differentiate itself in this cluttered market?
“Exclusive content has fuelled most of our growth so far, and we’re nurturing independent creators in the audio ecosystem. We have the exclusive rights of top shows that have crossed 50-100 million streams. Some of these shows have fan pages, and the user response is telling us that content IP would be valuable in the long run.”
“In future, audio licensing will not be limited to just smartphones. Because of the companionship audio offers, it will be available in IoT devices too,” he says.