3one4 Capital Partially Exits Kuku FM With 90% IRR

Kuku Bags $85 Mn To Boost Premium Content Playbook

SUMMARY

VC firm 3one4 Capital has announced that it has partially exited audio OTT soonicorn Kuku FM about a month after the startup closed its Series C funding round at $85 Mn

The partial exit generated an internal rate of return (IRR) of about 90% and also delivered a significant distributions to paid-in capital (DPI)

This marks the third exit for the VC firm this year. Prior to this, it completely exited ToneTag with 5-7X returns in June as well as raking in 58X returns from its complete exit from HR tech unicorn Darwinbox

VC firm 3one4 Capital has announced that it has partially exited audio OTT soonicorn Kuku FM about a month after the startup closed its Series C funding round at $85 Mn.

The VC firm claimed that the partial exit generated an internal rate of return (IRR) of about 90% as well as registering a 38.4X multiple on invested capital (MOIC). The firm also raked in a significant distributions to paid-in capital (DPI) via the transaction.

To note, the VC firm partook in Kuku FM’s seed funding round back in 2019 alongside India Quotient and Shunwei Capital.

The Pranav Pai-led VC firm has doubled down on its investment in the audio OTT platform over its subsequent rounds, partaking in its Series A and Series B rounds.

The audio OTT soonicorn closed its Series C round at $85 Mn in October, securing investments from investors like Granite Asia, Vertex Growth Fund, International Finance Corporation, Paramark, Tribe Capital India, among others.

Overall, Kuku FM has raised over $156 Mn in capital over seven funding rounds since inception.

On the financial front, Kuku FM’s operating revenue for the fiscal year FY24 more than doubled YoY to INR 88 Cr while its net loss declined 18% YoY to INR 96 Cr. The startup is yet to disclose its performance for the fiscal year FY25.

“Kuku exemplifies the qualities we seek in every investment: pre-consensus insight (seeing value in regional language audio before it was obvious), executional excellence (delivering consistent growth and innovation against all odds), and long-term category leadership (shaping the future of digital entertainment in India),” it noted.

Speaking with Inc42 recently, Pai said that the firm times its exit within six years of the initial investment. It typically plans its exit three-four years ahead of the fund’s vintage close through secondary sales to new investors.

Since inception in 2016, the firm has backed 100+ startups across four funds with a corpus of $570 Mn. Its portfolio includes names like Licious, Jupiter, Kapiva, among others.