India-based audio platform Pocket FM has secured $103 million in Sequence D funding led by Lightspeed Ventures, with participation from Stepstone Group. The corporate, which counts Tencent and Occasions Web as backers, goals to broaden into Europe and Latin America after taking a look at optimistic ends in the U.S. market.

The corporate has now raised $196 million throughout a number of rounds and is valued at $750 million, For Millionaires has completely realized.

For Millionaires reported final 12 months that the corporate was in talks with Lightspeed to guide the funding spherical that it introduced as we speak.

How does the platform work?

Pocket FM primarily provides audio collection primarily based round brief episodes: Customers can hearken to some collection or episodes without cost and unlock others by buying cash. As an alternative of adopting a subscription-based strategy to let customers entry all content material as Netflix or Spotify do, Pocket FM has discovered that the pay-as-you-go mannequin is extra appropriate for the corporate.

The disadvantage, from a income standpoint, is that customers don’t get locked into recurring fee cycles. However it will probably nonetheless pay dividends and appeal to repeat buying: If customers wish to hearken to extra content material in a collection they’ve to purchase cash — like shopping for level-up objects in a recreation.

The corporate can also be doubling down on the creator financial system. Final month, the corporate mentioned that it plans to speculate $40 million into its Wattpad-like writing platform Pocket Novel. Final week, the corporate’s co-founder Rohan Nayak posted on LinkedIn that greater than 90,000 writers had signed up on the platform since February 20. Pocket Novel additionally pushes customers to purchase cash to unlock content material.

However whereas each apps have a coin-buying mechanism to unlock content material, there is no such thing as a integration between them in the meanwhile. Which means you possibly can’t use the cash you obtain on Pocket FM to unlock content material Pocket Novel merchandise and vice versa.

Pocket FM additionally has a restricted audiobook vertical the place it competes with the likes of Audible with an identical pay-to-unlock technique. The corporate is operating this product solely in India with present partnerships.

Numbers recreation

Pocket FM usually optimizes for customers spending extra time on the platform. To that finish, the audio platform has greater than 100,000+ hours of content material and over 400,000 episodes throughout genres and languages.

The corporate’s U.S. enlargement — it opened for enterprise there in 2021 — has proved to be a significant income driver. It mentioned that Pocket FM has crossed $150 million ARR this 12 months — with a $100 million ARR contribution from the U.S. The corporate is current in different markets, nevertheless it counts the U.S. and India as its greatest markets.

The platform has additionally seen a excessive degree of engagement from its U.S. person base. Whereas globally, customers are spending 115 minutes on the audio platform, that common goes as much as 135 minutes within the U.S.

The Pocket Novel writing platform, which has native opponents like Omidyar Community-backed Pratilipi, has greater than 250,000 writers onboard. The corporate desires Pocket Novel to clock $100 million in ARR by 2025.

Efforts in GenAI and the creator financial system

It’s not shocking that Pocket FM is eager to check out generative AI-based options. It has already began testing a software for writers within the U.S. to transform their writings into audiobooks. The corporate is working with Eleven Labs to offer writers with an array of fifty AI-powered voices.

The startup famous that it is usually internally engaged on AI-powered instruments that may assist creators write their tales quicker.

Whereas Pocket Novel writers earn by way of a income share program, the startup supplies incentives for hitting writing targets. However utilizing AI instruments that usually generate unreliable or low-quality output means there’s lots of mediocre content material on the platform.

Nayak informed For Millionaires that basically it’s a platform’s job to filter out the noise.

“That you must filter out the noise and ensure you filter out the high-quality content material which you then make out there to listeners. The way in which we see AI a minimum of in our context, it’s extra about how you employ AI to unlock productiveness and effectivity positive factors for creators for writers,” he mentioned.

Pocket FM says that some writers on the platform earn greater than $3,000 monthly nevertheless it didn’t give details about common general revenue. The corporate doesn’t implement an exclusivity clause when creators are onboarding the platform, however the startup mentioned that it has some offers in place to personal the IP.

Lightspeed associate Harsha Kumar mentioned that whereas the urge for food for audio content material is world, Pocket FM might want to cater to native tastes in several geographies.

Platforms that depend on user-generated content material usually skew towards standard creators in the case of visibility and earnings. Kumar believes a honed advice algorithm will play a key half in guaranteeing parity.

“That is at all times a tricky stability. Firms can strive many issues all the way in which from hyper-personalization for shoppers to utilizing AI assistants to assist creators get higher and enhance their earnings. I imagine the platform’s advice algorithms have an enormous position to play — whether or not the platform recommends standard content material or it recommends content material per your style,” she mentioned.

Future plans for funding and enlargement

Individually, the corporate is already speaking to buyers for its subsequent spherical. Abu Dhabi’s sovereign wealth fund ADIA has held talks with Pocket FM for a possible mega funding spherical, For Millionaires reported final week.

The corporate didn’t immediately reply to that improvement however mentioned it has obtained important investor curiosity.

“As you’re scaling you see lots of investor curiosity usually. However whether or not it’s the new spherical or not is determined by kind of our scaling plan and is determined by one thing materializing,” Nayak mentioned.

“The largest problem is to adapt content material to enchantment to native style and native context. We’ve got discovered that some areas want tales which have higher native enchantment — the place characters have relatable names and places are identified and seen for instance. A separate execution problem is in fact constructing and working a world group that imbibes the identical tradition,” Lightspeed’s Kumar mentioned.

Nayak additionally talked about that the corporate is just not worthwhile but, nevertheless it has a excessive gross margin and is specializing in scaling. The startup has round 800 folks and plans so as to add 500 personnel throughout the globe.