A year after starting Pocket FM, Rohan Nayak and his co-founders knocked on investors’ doors to avoid the near-death of their first venture. Ultimately, 30 different investors all asked one question: “Who wants to listen to audio content?”
At that time, investors were more interested in scale and growth than funding another early-stage startup — even though Pocket FM was already making money — but Nayak and his team didn’t give up. Just one week before their company’s finances were scheduled to run dry, they received an investment of $5.6 million led by Lightspeed.
The non-music audio entertainment startup that started with the philosophy of building a niche riding on user-generated content had narrowly escaped death. What followed was a series of pivots that eventually built Pocket FM into the audio entertainment powerhouse it is today, giving global biggies like Spotify and Audible a run for their money in domestic and international markets.
It hasn’t been easy for Nayak and his co-founders, Prateek Dixit and Nishanth KS, to go from struggling to generate investor interest for survival to the $103-million Series-D funding announced earlier this year, led by Lightspeed and StepStone Group. The truth is that only a handful manage to reach Series D; most startups die prematurely. Pocket FM not only survived but also challenged and changed the playbook for global non-music audio entertainment.
In the process, Pocket FM proved all 30 of those earlier investors — who didn’t believe in the co-founders’ vision and refused to back them up in 2019 — wrong. Furthermore, the startup was able to crack its monetization model both in its home market of India and in the US, which is considered to be one of the world’s most challenging markets.
In 2023, the Indian-born startup had already crossed the $150 million annualized revenue run rate (ARR) in the US — a market it entered only in the last quarter of 2022. Interestingly, the US is currently the largest revenue market for Pocket FM, accounting for around 70% of the startup’s $150 million-plus ARR in 2023, a hockey-stick growth from just $2 million in 2022.
The question is: How did Pocket FM do it?
Audio Series: Pocket FM’s trump card
Finding a product-market fit wasn’t a cakewalk for Pocket FM. Nayak and the team needed upwards of 10 pivots to achieve that. What worked in their favor was the decision to revive the age-old radio drama in its modern avatar: the audio series.
According to Nayak, an audio series is a dramatic adaptation of a long-form story — primarily fiction — presented in episodic form. Essentially, it’s a tweaked version of the audio dramas that were popular in the 1940s but presented in a serialized manner. With its introduction of the audio series, Pocket FM has democratized audio entertainment.
“We identified an unexplored space in the entertainment industry driven by an increasing demand for audio fiction and crafted a playbook to address this opportunity across every key market,” said Nayak, its co-founder and CEO.
Capturing consumers
Resurrecting the radio drama required several critical shifts. It needed to suit the listening behaviors, preferences, and psyches of today’s consumers, which meant Pocket FM needed to rewrite the rulebook and create its own.
Every Pocket FM audio series comes equipped with gripping storytelling, an intriguing plot, immersive audio, well-defined characters, compelling content, and a well-thought-out strategy for ending every episode at a stage that leaves the listener wondering what happens next. This cliffhanger-closure of episodes brings listeners back to the platform, enhancing user engagement and sometimes alluring people to “binge-listen.”
The Indian startup’s gamble eventually paid off. According to Pocket FM’s listenership data, engagement is higher than on any other entertainment platform, especially in the US. Its 10 million registered users in the US spend an average of 135 minutes listening to content on the platform daily — 20 minutes higher than the global average of 115 minutes.
In other words, Pocket FM is redefining audio entertainment with high-quality, on-demand audio content as ubiquitous today as video streaming. Nayak’s vision also aligns with the growing trend of consumers seeking screen-free entertainment options, whether to combat screen fatigue or to multitask more effectively.
Paving the growth path for the future
In today’s fast-paced world, everything must be better and quicker than everyone else. To ensure that, Pocket FM has leaned on strategic partnerships. Earlier this year, it partnered with New York-based voice-cloning startup ElevenLabs to integrate AI text-to-audio technology into its text-based scripts, allowing Pocket FM to transform those scripts into full-blown shows at an unprecedented mass scale.
“With the new roll-out, the startup expects to triple its content library of over 100,000 hours of audio content this year. Pocket FM also said that during the experimental phase, the AI-powered tools helped it cut the cost of producing audio by 90%,” Pocket FM told TechCrunch earlier this year.
Besides cost reduction, Pocket FM is leveraging ElevenLab’s capabilities to empower its writers to effortlessly convert their narratives into compelling audio series with remarkable and unprecedented ease.
The six-year-old Indian startup has been leveraging AI as an enabler for creating and producing high-quality content that always resonates with consumers in each of its markets. It also uses other advanced technology tools for better user experience, recommendation, personalization, and engagement and, above all, follows a very flexible freemium monetization model backed by microtransactions and a pay-per-episode model.
In short, Pocket FM crafted its own playbook to redefine the non-music audio entertainment market keeping Audio Series at its core.
