Nearly three months after closing its pre-seed funding round, Mumbai-based vernacular audio platform Kuku FM has now announced its Series A funding round.
Talking to Inc42, Kuku FM founder and CEO Lal Chand Bisu said that the company has raised $5.5 Mn funding led by Vertex Ventures. The round saw participation from existing investors Shunwei Capital, India Quotient and 3one4 Capital.
Bisu said that the funds will be used to expand its offerings by adding more languages on the platform including Telugu, Bengali, Marathi and Gujarati. The plan is to release Marathi content in March, Bisu said. The team also plans to hire talent for its production and marketing support.
Kuku FM: 10X Growth In A Year
Founded in 2018 by Bisu, Vinod Meena and Vikas Goyal, Kuku FM is a podcast platform trying to reinvent traditional radio by allowing listeners to discover new, emerging and diverse audio content in various languages, and also engage with creators. Over the past year, the company claims that the app has seen 10x user growth and has over 1.5 Mn downloads.
A non-music audio platform, Bisu said the content ranges from long-form audio stories to podcasts, fiction and nonfiction audiobooks, self-help titles and more in genres such as education, entertainment, news, mythology, spirituality, learning and inspirations, stories, poems, and even jingles.
According to Bisu, daily users spend an average of 53 minutes on the app every day. The cofounder told us that the platform has 500K monthly active users, which have seen 20% M-o-M growth. In terms of creators, the company says it has over 3K creators who upload 100 hours of content daily.
Piyush Kharbanda, Partner at Vertex Ventures said, “While a lot has rightfully been said about the opportunity in the content space in India, we have really not seen many companies vying for the share of the ear of the Indian consumer. We believe that there is a fairly large opportunity in catering to the audio content needs of the regional language user, and Bisu, Vinod, and Vikas are building a platform that is well-positioned to be the market leader in the space.”
The Path Ahead: Monetisation And The Market
Speaking about the challenges in the original audio content category, Bisu told us that initially, the company sourced creators from YouTube and slowly moved on to Instagram to source talent for its platform. It has repeatedly emphasised that it will pay the creators once it has enough money. Bisu relates this to YouTube’s growth trajectory as well where creators only get paid after they reach a certain subscription base.
“We tell creators that in initial 2-3 years, you had to build the brand to earn money on YouTube. It is similar for our platform,” Bisu says.
The company sees traction from cities like Delhi, Jaipur, Indore, Ahmedabad, Lucknow, Bhopal and others. “Our goal is to democratise audio content by providing production, distribution and marketing support to empower creators to monetise their content, grow their audience and connect with their fans through our platform,” the company had said earlier.
According to a PWC study, monthly active podcast listeners in India grew to 40 Mn at the end of 2018 from 25.8 Mn in 2017. Currently, online music platforms like Times Internet-owned Gaana, JioSaavn, Apple Music and Spotify are the leading online podcasts providers in the market.
While many of these apps have grown in stature thanks to the wide music library, podcasts tend to offer higher engagement, repeat usage and tend to snowball into cultural phenomena as seen in the case of superhit podcast Serial. With podcasts, OTT music streaming apps like Gaana, JioSaavn and Spotify are witnessing new growth trajectories in the Indian market.
Invest India projects the Indian media and entertainment industry to touch $34.8 Bn by 2021. It further states that the industry is projected to grow at a CAGR of 14% over the period 2016-2021, outshining the global average of 4.2% compounded annual growth rate (CAGR), with advertising revenue expected to increase at a CAGR of 15.3% during the same period.
For 2020, Kuku aims to bring monetisation into play and grow its community of creators 10x with support for three new regional Indian languages.
Bisu had earlier told us, “We help them in content creation, distribution, and it’s monetisation and we are going to make money in every aspect of this process.” Adding that the subscription model and micropayment will be the startup’s primary business model in times ahead.
Anurag Ramdasan, principal – Investments, 3one4 Capital, said, “We continue to be highly impressed by the phenomenal growth and engagement metrics exhibited by Kuku FM and the continued interest they have received from the investor ecosystem.”
Dealing With Quality Control, Government Rules
The government’s focus on online content has also caught independent social media platforms, other than Facebook and Twitter. For example, the government has earlier proposed internet censorship by amendment of Section 79 of India’s IT Act, which would force intermediaries of all kinds to take down content marked as inappropriate by authorities within 24 hours. If a company receives a complaint from a law enforcement agency, the firm should trace and report within 36 hours of the origin of the content and disable that user’s access within a day.
In such a scenario, Kuku FM is doing its part to monitor the content which goes on its platform. Bisu told us that the company has certain basic standard requirements like the quality of audio etc which are checked before any uploads go live on the platform.
Further, in the light of such content checks, he added that since the company isn’t that large, it is able to moderate all the content for any issues. Going forward, as its creator and user base expands, Kuku plans to build a technology solution to moderate all content.