Pocket FM's revenue up 6x to Rs 1,052 crore in FY24, losses reduced

The revenue growth was primarily driven by subscription income from micro-transactions

Audio series startup Pocket FM reported consolidated revenue of Rs 1,051.97 crore for the financial year 2023-24 (FY24), registering around 6x growth from Rs 176.36 crore in the previous financial year.

 

Meanwhile, its losses reduced to Rs 165 crore during the period compared to Rs 208 crore in the last financial year.

 

The revenue growth was primarily driven by subscription revenue from micro-transactions, which came in at Rs 934.73 crore in FY24, up from just Rs 160 crore the previous year.

 

“This year (FY25), we are expecting about 80 per cent growth in revenue for our business,” Anurag Sharma, chief financial officer (CFO), Pocket FM, told Business Standard.

 

“All our businesses across geographies are operating at almost positive gross margins. If we are operating on a negative cash flow trajectory, it is largely because of our investments in content – we initially have to invest heavily in creating content and then distribute it,” he added.

 

Pocket FM operates on a freemium model where it offers consumers 15 minutes of free viewing for each of its audio series, after which they can choose to purchase coins for Rs 50-100. These coins can be used to unlock new episodes.

 

“The entry barriers to watch shows is very small, close to Rs 2-3 in India,” Sharma said.

 

Pocket FM registered more than 45 million such micro-transactions in FY24, which bolstered the company’s revenue growth globally.

 

According to Sharma, over 30 of Pocket FM’s audio series offerings crossed Rs 10 crore in revenue each, including seven that crossed Rs 100 crore. The company recorded over 100 billion minutes of streaming via its 200-million listeners during FY24.

 

Moreover, over 40,000 AI audio series have contributed to over Rs 25 crore in revenue.

 

Meanwhile, revenue from advertisements increased over seven-fold, from Rs 12.5 crore to Rs 89.34 crore. The company improved its expense-to-earnings ratio from 2.18 in FY23 to 1.16 in FY24.

 

Pocket FM currently operates in India and the US, and has made a recent foray into Europe and Latin America.

 

“As much as 70 per cent of our revenue comes from the North American market. Now we have expanded to Europe and other high-ARPU markets,” Sharma added.

 

The company had earlier reported a two-fold increase in revenue for its India business at Rs 261 crore, and a 78 per cent decline in losses at Rs 15.7 crore in FY24.

 

In March this year, Pocket FM had raised $103 million in series D funding, in a round led by Lightspeed Venture Partners, with participation from Stepstone Group. This nearly doubled the company’s valuation to about $750 million from $390 million when it previously raised $65 million in its Series C round in March 2022.