NISHANT S. and Rohan Nayak were batch mates at IIT Kharagpur who nurtured the idea of founding a start-up at some point in time in their lives. As destiny would have it, today, the duo along with Prateek Dixit, who worked with Nishant, are the force behind online audio entertainment platform Pocket FM, which has raised over $93.5 million till date, and is valued at over $400 million.
The story telling platform across genres is available in Hindi, English, Tamil, Telugu, Malayalam, Bengali, Kannada, and Marathi. Over 100,000 hours of content is powered by a community of over 50,000 professional user-generated content writers and voice-over artists. The story generation happens over a free sister app called Pocket Novel. The community of writers comes from as diverse a background as an investment banker to a doctor to a collegian. “One of our top-rated horror stories, Yakshini, is written by an engineering student and has crossed over 300 million reads,” says Nishant. The app has over 80 million unique listeners, and is clocking an and is clocking an annualised revenue run rate of over $25 million.
The average consumption time on the platform by a user is two hours a day. Every episode runs for 15 minutes, and each story has nearly 500 episodes that lasts for three to four months with no ad breaks in between. The company has created a sub plan more akin to a usage-based pricing plan. For instance, for ₹100, the subscriber will get a set number of coins that can be used to listen to any episode. Currently, 80% of revenues come from micro payments (subscription plans) and 20% is ad-supported.
Building the product is where the third co-founder has his hands full. “While we have partnered with AWS for our Cloud infra, more than 70% of the coding for the algorithm powering Pocket FM’s AI has been done in-house.” says Prateek. As the CTO, Prateek also has the onerous task of customisation. “For instance, a story written by a reader in Delhi would be customised (where the places and cities and names could be changed) to cater to a listener from the hinterlands of Tamil Nadu,” says Prateek.
Unlike other start-ups, Pocket FM is not burning cash to acquire customers. “All our marketing costs are recovered within 12 months by the user. So we are not incurring a negative customer acquisition cost,” says Rohan. A chunk of the recent $65 million raise is still residing on the books as dry powder — enough runway for Pocket FM to create a story of its own. — V. Keshavdev