Pocket FM’s FY23 Revenue Jumps Over 7X To INR 131 Cr; Losses Shrink By 56%

Indian audio over-the-top (OTT) platform Pocket FM’s India arm narrowed its net loss by 56% year-on-year (YoY) to INR 75.7 Cr in the financial year 2022-23 (FY23) as revenue jumped and ad expenses were slashed.

The startup had reported a net loss of INR 171.6 Cr in FY22 on an operating revenue of INR 17.5 Cr. Pocket FM’s operating revenue surged 663% YoY to INR 129.7 Cr in FY23.

Founded in 2018 by Rohan Nayak, Prateek Dixit and Nishanth KS, Pocket FM offers audio content in long formats, audio shows, stories, novels, and podcasts. The platform hosts audio content with the help of writers and voice actors, creating content in multiple Indian languages including Tamil, Telugu, Malayalam, Bangla, Hindi, Kannada and Marathi.

Hence, it earns in the form of subscription revenue, advertisement revenue, and revenue from audio content and related services to the parent entity.

The startup said in a media statement that it has witnessed a 417% increase in microtransaction revenue, which is content monetisation, to INR 82.8 Cr. 

Its advertising revenue also jumped 1,120% to INR 12.17 Cr in FY23 when the company was at a pilot stage for its brand and ad solutions streams. 

Including its interest income and other non-operating income, Pocket FM’s total revenue surged 647% YoY INR 131 Cr in FY23.

“As Pocket FM charts its path in FY 2023, our focus is clear: strategic growth, global expansion, and financial resilience. Our commitment to staying financially healthy ensures a strong foundation for scaling up not just in India but also globally,” said Anurag Sharma, chief financial officer at Pocket FM.

Controlling Expenses

Along with an expanding business, Pocket FM registered a 9.32% rise in overall expenses to INR 206.78 Cr in FY23 from INR 189.1 Cr in the previous year. This rise is quite negligible compared to the 10X jump in its expenses in FY22.

Pocket FM also said that its expense-to-revenue ratio improved to 1.58 in FY23 from 10.78 in FY22.

Content Expenses: Reflecting the expansion in its content library, the platform’s content expenses more than doubled to INR 21.3 Cr in the reported fiscal from INR 9 Cr in FY22.

Ad Expenses: However, Pocket FM brought down its advertising and marketing expenses by 45% to INR 70.57 Cr in FY23 from INR 128 Cr in the previous fiscal.

Employee Cost: Its employee benefit expenses increased to INR 73.3 Cr in FY23 from INR 30.7 Cr in the previous year. The rise, said Pocket FM, aligns with its growth strategy.

In that INR 65.6 Cr was spent on salaries and wages while ESOPs cost the company INR 4.7 Cr in FY23.

Legal Professional Charges: Pocket FM’s legal professional charges also saw a sharp jump to INR 10.1 Cr in FY23 from INR 6.8 Cr the previous year.

It is pertinent to note here that Pocket FM was in a legal battle with its peer Kuku FM in FY23. The former had launched a litigation against Kuku FM in May 2022 restraining the latter from publishing summaries of the titles and violating its exclusive rights. In January last year, the matter was settled as Kuku FM entered into a settlement agreement with Pocket FM in the copyright infringement case. 

Last year, Pocket FM also secured debt funding of $16 Mn from Silicon Valley Bank to expand its audio library, boosting its creator community and accelerating revenue. Prior to that, the startup had raised a total of $93.5 Mn in funding from the likes of Lightspeed, Goodwater Capital, Times Internet, Tencent, and others.

“With continuous investments into content and the writers’ community, we look forward to elevating entertainment not just limited to listening experiences but replicating the experience across other formats through IP stronghold,” Sharma said.

[The article has been updated]