[YS Exclusive] Podcasting platform Kuku FM in talks to raise $15-20 million

Regional language podcasting platform, KukuFM is in initial talks to raise its Series B round, two people close to the development told YourStory.

The upcoming round could be anywhere between $15 million and $20 million, according to one of the two sources, and existing investors including India Quotient and Vertex Ventures could be participating in the round. 

India Quotient is a Mumbai-based venture capital firm that invests in early-stage startups. Its portfolio includes the likes of social media unicorn ShareChat, and D2C beauty brand SUGAR Cosmetics. 

Singapore-headquartered Vertex Venture has been an early backer of FirstCry, travel portal Yatra, and unicorn meat delivery player Licious, among others. Interestingly, while FirstCry became a unicorn in 2020, Licious joined the coveted billion-dollar valuation club earlier this month.

The Mumbai-based platform is looking for a new investor to lead the round, however, YourStory could not immediately ascertain the name of the lead investor. The two people in the know requested anonymity as the discussions were confidential. 

An email shared with KukuFM and India Quotient did not elicit any response at the time of the publishing of this story. 

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Founded in 2018 by former Toppr executives Lal Chand Bisu, Vinod Meena, and Vikas Goyal, KukuFM is a curated platform where users, most of whom hail from Tier II and III cities, create audio content in Hindi, English, Marathi, Gujarati, and Tamil, among other regional languages. 

Operating as a free platform, the firm introduced subscriptions for Rs 399 in 2020. KukuFM currently claims to have 100,000 paid subscribers. 

The regional language podcasting platform raised its first venture funding round in November 2019, led by Shunwei Capital. The platform later went on to scoop $5.5 million in the Series A round led by Vertex Ventures, with participation from India Quotient and 3one4 Capital, among other existing investors.  

Regional content apps were attracting investors from all over back in 2017 and 2018, when more than a dozen apps mushroomed in the startup ecosystem after the Jio boom. But the investor-backing in the sector slowed down in 2019 as many apps were either shelved or were taken over.

While Stellaris Venture Partners-backed Manch shut shop, short-video app Clip, backed by Matrix Partner India, was acquired by ShareChat. 

However, the funding boom and the ban of many Chinese apps, brought in good fortune for ShareChat, which raised $647 million in about seven months, and got into the unicorn club.

“More investors are now interested in backing regional social media apps as we have seen a few success stories. There are also more people willing to spend money online from Tier II and Tier III towns, which was not the case before the pandemic,” says another investor actively investing in social media apps, different from the two people quoted above and who also requested anonymity. 

The pandemic-led lockdowns brought in 749 million users on the internet in India in 2020, up from 636.73 million in 2019, according to Statista. Many of these new entrants hailed from places beyond metro cities and were introduced to online transactions, bringing in more opportunities for players operating in the regional language content space.