Pocket FM completes first ESOP buyback worth $8.3 million

Pocket FM said the buyback saw participation from many former and existing employees

Audio entertainment platform Pocket FM has completed its first Employee Stock Ownership Plan (ESOP) buyback worth $8.3 million, the company said on April 1.

The buyback saw participation from many former and existing employees, the company said with sharing more details.

"This emphasises our continued commitment to acknowledging the efforts of our teams, and we're pleased that despite the challenging economic conditions, we remain unwavering in offering opportunities for wealth creation and fostering a culture of growth within Pocket FM," co-founder Rohan Nayak said.

The announcement comes on heels of Pocket FM raising $103 million in Series D funding at a valuation of $750 million in March.

Over the years, an increasing number of the so-called new-age companies such as PhonePe and  Swiggy have been rewarding employees with ESOPs and buying them back at a lucrative price, which eventually generates wealth for employees, especially the ones who have joined an organisation in the early days.

ESOP cashouts have led to $1.46 billion of wealth in the hands of startup employees since the beginning of 2021, according to data from Qapita, signalling a change from the times when staff were not quite sure if the options would turn into a real shareholding and then into money. This was despite a 62 percent drop in cashout events in 2023.

Read: Pocket FM's India arm revenue jumps to Rs 131 crore in FY23; loss reduces by 56%

Founded in 2018 by Nayak, Prateek Dixit and Nishanth Srinivas, Pocket FM claims to offer over 100,000 hours of content, including over 2,000 exclusive audio series and more than 400,000 episodes.

This content spans across genres such as romance, drama, thriller, fantasy, and science fiction in English and Hindi and several Indian languages such as Tamil, Telugu, Malayalam, Bengali, Kannada, and Marathi.

The service offers consumers free access to a few episodes every 24 hours. To access more episodes, users can purchase virtual coins to unlock them, a model that is quite prevalent among several prominent mobile games.

Pocket FM clocked an annualised revenue rate (ARR) of $150 million across the world as of December, a feat achieved in less than two years and growing by 57 percent on a quarterly basis. Of this, more than $100 million came from the United States, Nayak said last month.

In February, the company also launched an online novel reading platform, Pocket Novel, as part of efforts to expand its offerings to other categories and formats.

The Bengaluru-based startup has committed an investment of $40 million towards this product with a goal to achieve $100 million ARR globally by 2025.