Exclusive: Pocket FM bags Rs 41 Cr in Series A; valuation scales 6X

Vernacular audiobooks and podcast marketplace Pocket FM has raised Rs 41 crore in Series A round from Tencent, Times Group and Lightspeed India. 

Tencent Cloud BV led the round by investing Rs 23.41 crore, whereas Lightspeed India and Times Group infused Rs 11.22 crore and Rs 6.7 crore respectively, regulatory filings show. The deal was executed in April when foreign direct investment from Chinese investors was allowed under the automatic route.

Pocket FM had raised Rs 4.61 crore its seed capital from Lightspeed and Times Group in December  2018. Importantly, this is the second bet by Tencent in vernacular content space. Early this year, it led a Rs 76 crore worth Series C round in Bengaluru-based Pratilipi.

As per Fintrackr’s estimate, Pocket FM was valued at around Rs 116 crore (post-money), which is a jump of 6.3x in its valuation as compared to Rs 18.5 crore when it raised Rs 4.6 crore in its seed round.

Promoters' collective shareholding has been diluted from 64.75% to 41.65% after the fresh infusion. Rohan Nayak controls 15.1% while Nishanth Srinivas commands 14.47% and Prateek Dixit owns 12.08%.

 Lightspeed now is the biggest stakeholder in the company. It holds 22.61% stake in Pocket Fm followed by Tencent BV which has acquired 20.1% in this round of funding. Times Group now controls a 9.04% stake, whereas the ESOP pool consists of 6.43%. With the Series A round, the company has raised a total of Rs 45.7 crore external equity capital.

Pocket FM deals in four genres: audiobooks, podcast, entertainment self-help book (personality development and motivational). According to its website, it offers over 10,000 hours of audiobooks and podcasts across three languages: Hindi, Tamil and Bengali. 

Over the past two-three years, the consumption of audio content has shot up among vernacular users. The segment has been dominated by Pratilipi that has raised about $30 million across three institutional rounds. 

Other notable players include KuKu FM, Awaz, Headphone and a few others.

This year has turned out well for companies in the vernacular audio space. Pratilipi had raised $10 million in Series C round in April while KuKu also raked in $5.5 million in Series A rounds led by Vertex Venture in Feb 2020. Existing investors 3One4 Capital, Shunwei and India Quotient also participated in the maiden institutional round.

Y Combinator-backed Khabri also scooped up seed financing from blue-chip angels such as Rajan Anandan, Kunal Bahl, Rohit Bansal, Shailesh Rao and Rajesh Sawhney.