Pocket Entertainment, the parent company of audio series platform Pocket FM, recorded a 68 percent increase in its revenue to Rs 1,768 crore in FY25, up from Rs 1,052 crore in the previous year, co-founder Rohan Nayak told Moneycontrol on April 16.
The growth was driven by strong momentum across India, the US and Europe markets, along with an expanded content catalogue and improved monetisation, Nayak said.
He also noted that the company's annual recurring revenue (ARR) has now exceeded Rs 2,000 crore in March. Over 85 percent of our revenue comes from microtransactions and we are witnessing more than 5 million transactions every month.
"At the operational level, we are profitable and investing heavily in Europe and LATAM (Latin America), and building out our artificial intelligence capabilities, which will define the next phase of our growth But we are keeping our burn efficient, our unit economics are strong, and the path to profitability is clear and deliberate" he said, without disclosing any specific figures. The company had reported a loss of Rs 165 crore in FY24.
Over the past year, Pocket Entertainment has also focused on optimising costs and improving operational efficiency as part of its push for profitability. This has involved multiple rounds of layoffs, including 75 employees in January 2025 and around 50 in October 2024. The company also parted ways with 200 contractual writers in July 2024.
US market profitable; LATAM expansion next
Pocket Entertainment's US business, which has been operational for just over two years, is profitable while India is showing "tremendous depth in both user growth and monetisation", he said.
Nayak stated that Europe is clocking Rs 100 crore in ARR within six months of operations, driven by early success in Germany and the United Kingdom.
"We see Europe as a long-term strategic bet. It’s still in the investment phase and our focus right now is on building a deep and diverse content base, localising experiences, and expanding our presence across more countries. Over the next few quarters, we will be launching in additional languages and doubling down on our marketing and creator ecosystem in the region" he said.
Pocket Entertainment is now focusing on expanding into Latin America, particularly Brazil and Mexico, which have "storytelling cultures that are a natural fit for what we do", he said. The company is currently building out its content playbook in the region.
The Bengaluru-based startup, which counts Lightspeed, Tencent, and Tanglin Venture Partners among its investors, recently restructured as Pocket Entertainment, which now operates three core verticals: Pocket FM, a bite-sized online novel app Pocket Novel, and an artificial intelligence (AI)-first webcomics platform Pocket Toons.
Pocket FM, the company's flagship product, offers more than 75,000 audio series on its platform spanning genres such as romance, drama, thriller, fantasy and science fiction. The series are offered in English and several Indian languages such as Hindi, Tamil, Telugu, Malayalam, Bengali, Kannada and Marathi.
"Today, not just romance or drama, we are seeing a growing appetite for fantasy, sci-fi, and thrillers, and we have invested heavily in building depth across these categories" Nayak said.
As of December 2024, the app claims to have more than 200 million listeners who have streamed more than 100 billion minutes of content, with an average daily listening time of over 115 minutes.
Pocket FM, which previously offered its content through various subscription plans, moved to a microtransactions-led model in early 2022.
The app now provides users with free access to a few episodes every 24 hours, while additional episodes can be unlocked by purchasing virtual coins through in-app purchases. Pocket Entertainment has subsequently replicated this model in other products like Pocket Novel and Pocket Toons.
Nayak said over 85 percent of Pocket Entertainment's revenue now comes from microtransactions and the company is witnessing more than 5 million transactions on a monthly basis. It had reported more than 45 million transactions in 2024.
AI acceleration
Pocket Entertainment is investing significant efforts in using AI to accelerate its story production, lower its per-show cost, and build new capabilities to help its writers brainstorm, draft, and experiment faster.
In June 2024, Pocket Entertainment partnered with AI voice cloning startup ElevenLabs to launch a feature called AI Audio Series, which allows writers to turn their stories into audio series on the platform with a single click.
The startup has produced over 50,000 AI-assisted shows at present that have generated over Rs 50 crore in revenue, registering a 30-40 percent growth on a monthly basis.
"AI has become one of the most powerful enablers (for the company's vision)...We have always believed that the best stories are born from human emotion and insight – and AI, when used thoughtfully, can enhance that process" he said.
Pocket Entertainment is also leveraging AI to build a 'future-ready' storytelling engine that helps them do more experiments to identify potential blockbuster shows and scale them to wider audiences.
"This has fundamentally changed how we scale content...It allows us to reallocate our creative energy to take more risks and build at a scale that was unimaginable even two years ago" he said.
Pocket Entertainment was last valued at $750 million when it raised $103 million led by Lightspeed in March 2024. It has raised $196.5 million financing to date.
The company competes with cross-town rivals Kuku FM, which counts Nandan Nilekani's Fundamentum Partnership, International Finance Corporation (IFC), Google, and Krafton among its backers and Pratilipi which recently raised $20 million funding from Jungle Ventures.
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