India’s Pocket FM doubles revenue run rate to $500M as AI powers 93% of audio content

Pocket FM, an Indian audio storytelling platform, has doubled its annualized revenue run rate to $500 million over the past year as it increasingly turns to artificial intelligence to produce its content.

AI now powers 93% of Pocket FM’s overall catalog and is used to produce 99% of its new content, co-founder and CEO Rohan Nayak said in an interview.

The shift comes as generative AI makes deeper inroads into content production. However, Pocket FM, which started in 2018 as a platform for serialized audio stories, still relies on human creators for ideas and storytelling, while using AI to turn those concepts into finished content at scale.

“We want to create great IPs that last 100 years, and that needs humans,” Nayak told TechCrunch.

Pocket FM’s current approach focuses on building AI tools around the creative process instead of generating content autonomously. AI head Vasu Sharma, a former Meta and Tesla scientist, told TechCrunch that the startup has trained its own models for tasks such as creative writing and text-to-speech, using years of production data and signals on how listeners engage with stories.

Economics have played a key role in Pocket FM’s push toward AI. The technology, Nayak said, has made its content production about 80x cheaper. He added that 100 hours of content, which previously took about a year to produce, can now be made in a day.

The move toward AI has also led to a notable increase in the amount of content Pocket FM produces. Its more than 550,000 creators are now producing about 2.5 million hours of AI-powered content a year, Nayak said. Two years ago, the startup’s entire catalog comprised about 100,000 hours of content. The platform has overall built a library of more than 770,000 audio series.

The influx of content has helped Pocket FM improve its ability to retain listeners, Nayak said, noting that the startup’s 12-month revenue retention rate has risen to 76% from 44% two years ago. Nayak attributed that in part to having more stories available to match different listener preferences.

Pocket FM’s annualized revenue run rate stood at about $250 million a year ago before climbing to $430 million in April and $500 million now. (The startup calculates the figure by multiplying its monthly revenue by 12, rather than using contracted recurring revenue, Nayak explained.)

The growth came as Pocket FM ramped up its use of AI in content production; expanded into markets, including the U.K., Germany, and France; and launched user-generated content in the U.S.

Some 96 titles on Pocket FM’s platform have now generated more than $1 million in revenue each, including 13 that have crossed $10 million, the startup said.

Beginning with India as its primary market, Pocket FM now has more than 250 million listeners across over 20 countries. The U.S. market, which grew around 70% over the past year, is its largest market, accounting for about 70% of its annualized revenue run rate.

About $85 million of Pocket FM’s annualized revenue comes from ads, while the remaining roughly $415 million comes from users paying to unlock individual episodes, Nayak said.

Moving beyond audio

Pocket FM’s parent company, Pocket Entertainment, is now looking to take its AI-driven content model beyond audio. Its three-month-old microdrama app, Pocket Saga, has reached an annualized revenue run rate of about $15 million, Nayak told TechCrunch.

The Pocket Saga app is currently available only in the U.S. and its content is entirely AI-produced, unlike Pocket FM, where humans remain involved in developing stories. The startup is also using successful Pocket FM audio stories to create AI-generated videos for Pocket Saga, with no traditional live-action production involved.

Pocket Entertainment plans to expand further beyond audio and microdramas, with plans to enter at least two more entertainment formats over the next five years. The company also aims to turn successful stories from its platforms into books, television, and movies through licensing deals.

Alongside the growth, Bengaluru- and Culver City, California-based Pocket Entertainment is in talks with investors about raising fresh capital. A recent report said the startup was seeking $100 million to $120 million at a valuation of about $2 billion.

Nayak did not deny the talks but said the startup was under no immediate pressure to raise capital. He declined to say how much it could raise or at what valuation but noted that a new round would primarily be used to invest further in AI and new entertainment formats.

Meanwhile, Pocket Entertainment said it is profitable and generating positive cash flow on an adjusted basis, but declined to disclose its profit, cash flow, or margins.

A public listing, however, is still some way off. Nayak told TechCrunch that Pocket Entertainment does not plan to go public in the next 24 months. It’s keeping its options open for an eventual listing in either India or the U.S., though.