Pocket FM’s scale soars 9X to Rs 150 Cr in FY23

Audio series platform, Pocket FM has managed over eight-fold spike in its operating scale in the fiscal year ending March 2023. Significantly, the firm also improved economics contracted its losses by about three-fourth.

While we will analyse how Pocket FM spruced up its bottomline later, for now, let’s focus on its collection. Pocket’s FM revenue from operations soared 8.7X to Rs 148.7 crore in FY23 from Rs 17 crore in FY22, according to the company’s provisional financial statement accessed by Entarckr.

The firm facilitates long-form audio content including audio shows, stories, and novels. Pocket FM didn’t disclose the revenue break up but the company’s major collection [94%] came through subscriptions in FY22. 

The rapid growth of Pocket FM in the past year is also evident from its expanding user base. According to market insight platform Sensor Tower, the company's Android and iOS apps recorded approximately 33 million downloads in 2023, including over 13 million in the past three months.

Akin to other growth-stage startups whose largest cost centered around employees, its employee benefits accounted for 36.7% of the overall costs. As the company grew exponentially in FY23, this cost grew 2.3X to Rs 71.6 crore. 

Pocket FM sliced its advertising costs during the year by a sharp 46.1% to Rs 69 crore. Its content, IT, and legal and professional costs catalyzed the company’s expenditure to Rs 195 crore in FY23 from Rs 189 crore in FY22. 

The towering scale and controlled expense helped Pocket FM to contract its losses by 73.5% to Rs 45.47 crore in FY23 from Rs 171.6 crore in FY22. Its ROCE and EBITDA margin improved to -126.17% and -22.99% respectively. On a unit level, it spent Rs 1.31 to earn a rupee of operating revenue in FY23.

Moreover, the company has also mentioned Rs 20 crore in revenue (provisional) for the first month of FY24 which roughly translates into Rs 240 crore annualised run rate for the ongoing fiscal year.

Pocket FM has raised $94 million to date and is in late-stage talks to raise $80-100 million from existing and new investors. The development was exclusively reported by Entrackr early this month.  According to the data intelligence platform, TheKredible their holding entity Pocket FM Corp holds 61.04% while Lightspeed is the largest external shareholder with 8.3% followed by Tencent Cloud and Bennet Coleman & Company.

Pocket FM’s competitor Kuku FM has already filed its FY23 numbers. The Fundamentum-backed company’s revenue from operations rose to Rs 41.2 crore during FY23 from Rs 4.4 crore in FY22. Its losses also spiked 2.23X to Rs 116.5 crore in the last fiscal year.

Any subscription based business in India is a slugfest, and Pocket FM and its peers are in probably the toughest corner of the subscriptions market. The jump in revenues is creditable, coming as it does with a cut in advertising costs as well. However, profitability, and sustained profitability at that is still some time away, as evident from the high fundraising plans of the firm. Indians are beginning to pay for subscriptions, but not fast enough for most firms. It remains to be seen if Pocket FM is among the firms left standing by the time the market changes for good.