Podcasting and audio platform Kuku FM has raised $21.8 million in its Series B1 funding round led by Fundamentum Partnership. Paramark Ventures and existing investors Kuku FM KRAFTON, 3one4 Capital, and Vertex, among others, also participated in the round.
It was the startup’s second fundraiser this year. It raised $19.5 million in its Series B round this March. Apart from this, it was also Fundamentum’s first investment round led by Nandan Nilekani from the second fund it recently launched. Last month, the tech investment firm announced a $227 million raise for its second fund.
Kuku FM plans to use the new funds to expand its content catalogue, launch audio content in multiple languages and strengthen the overall content creation ecosystem. The platform aims to increase its active paid subscriber base to 10 million by the end of 2023 from 1.6 million in August 2022.
Founded in 2018 by Lal Chand Bisu, Vikas Goyal and Vinod Kumar Meena, Kuku FM is a non-music audio platform that offers exclusive audio content across categories such as book summaries, audiobooks, courses, and motivational speeches, among others. The startup claims to have grown 25x in the last 12 months and crossed $10 million in ARR in August this year.
With content currently available in seven languages including Hindi, Tamil, Bengali, Malayalam and Kannada, the audio platform is also targeting to launch content in three more vernacular languages – Punjabi, Gujarati and Rajasthani – in the next quarter.
Prateek Jain, Director of Fundamentum Partnership, said, “This is one of the first investments we are making in content. The investment firm does not believe in ad-led business models in the country and Kuku FM’s core beliefs are in line. with this thesis.”
He added, “During its four-year journey, Kuku FM has built a business with robust foundations, a strong monetization model and a national community of creators and listeners. Kuku FM’s technology-driven digital approach, targeting the Bharat audience, fits perfectly with our investment focus.”
Lal Chand Bisu, Co-founder and CEO of Kuku FM, said, “Kuku FM’s growth demonstrates the Indian audience’s desire for premium, unique and immersive digital audio experiences. We have seen a rapidly growing interest in regional language content in tier II, III cities, suburban and rural segments.”
Bisu added, “We aim to continue building a strong and diverse network of creators to cater to this segment of the Bharat audience.”
With a business model largely focused on paid subscriptions and a conversion rate of 11%, Kuku FM claims that the majority of its subscriber base, about 70%, comes from tier II, III cities and beyond.
Interestingly, India’s emerging digital payments ecosystem, underpinned by the Unified Payments Interface (UPI), has also allowed Kuku FM to penetrate deeper into the country. Currently, about 90% of its user payments are through UPI, the startup said.
Kuku FM’s peer audio startup Pocket FM also raised $65 million in its Series C funding round this March, led by Goodwater Capital, Naver and Tanglin Venture Partners. Other competitors of Kuku FM include big names like Spotify, Audible and other startups like IVM, Pratilipi FM and others.