On Tuesday, audio series platform Pocket FM announced that it has received $16 million in debt financing from Silicon Valley Bank (SVB), a subsidiary of First Citizens Bank with headquarters in the US. With this latest cash infusion, the firm said it plans to quadruple its strategic targets to develop its library of audio series, grow its creative community internationally, and boost revenue.
“With an emphasis on good unit economics, we are happy to be pioneering the development of a new entertainment category in the shape of audio series.” The debt financing we have obtained offers us the means to keep growing our content collection and create the biggest audio series platform internationally, according to a statement from Pocket FM Co-Founder and CEO Rohan Nayak.
Nayak told ET that even without the debt financing, the company was properly capitalized. But he added that the debt financing demonstrated the firm’s “strong unit economics” and supported its business strategy. He stated that the organization is currently concentrating on the US and India as markets. The other European markets are showing some interest, according to Nayak.
Nayak referred to SVB as a “trusted partner” and said that the companies had a close relationship when it came to raising money from them.
We don’t see any concerns about their financial viability following the acquisition by First Citizens Bank, he continued. They have a strong history of working with fast-growing companies, such as AirBnB, Stripe, DoorDash, and others.
According to Pocket FM, its 80 million global listeners spend an average of more than 150 minutes per day listening to the station. According to Nayak, the engagement stats for audiobooks, podcasts, and even music indicate that users spend about 60 minutes per day engaging with these media.
Therefore, it is evident that audio series as a whole will not only become a popular form of entertainment but also have a higher potential for audience participation and financial reward than audiobooks and podcasts. Compared to many other entertainment genres, we have a substantially bigger gross margin, he said.
The platform, which was established in 2018, has raised $93.5 million up to Series C. The overall capital infusion has climbed to US$109.5 million with this new loan transaction, the company reported.
“Pocket FM has a creative vision for audio storytelling and is working to establish it as a popular form of entertainment. Chris Cameron, senior vice president at Silicon Valley Bank”, noted that the company’s distinct approach to audio entertainment and strong unit economics demonstrate tremendous revenue potential in a sizable addressable market.
According to the company, it had a 12x increase in revenue last year and expects to achieve a $25 million ARR (annualised revenue run rate) in October 2022 thanks to the success of its micropayment-led pricing strategy.
