Audio content platform Kuku FM, backed by Nandan Nilekani’s investment firm Fundamentum Partnership, aims to turn profitable by mid-2025 as it expands beyond audio content and leverages generative AI tools to boost output and reduce production costs.
“With the use of Gen AI tools, output has increased 2-3x. Previously, our creator community needed a person for everything from thumbnails to audio engineering and recording. Now, we provide subscriptions to more than 20 tools so they can handle most tasks themselves,” said Lal Chand Bisu, CEO and co-founder.
In FY24, the company reduced its losses to Rs 96 crore, down from Rs 117 crore in FY23. Revenue from operations doubled year-on-year to Rs 88 crore in FY24, up from Rs 41 crore a year ago. The company now anticipates more than doubling its revenue in FY25 compared to the previous year.
Kuku FM offers serialised fiction and audio content across various genres such as history, biographies and personal finance, available in nine Indian languages for an annual subscription of Rs 899. It also provides a microtransaction model, currently utilised by only 20% of its 2.75 million paid users.
In comparison, its closest competitor, Pocket FM, relies heavily on microtransactions, both in India and the US, rather than paid subscriptions. Alongside its presence in the Philippines, Kuku FM recently launched its services in the US about four months ago. Pocket FM, by contrast, has about 10 million registered users in the US, out of a total of 130 million registered users.
Expanding beyond audio, Kuku FM launched Kuku TV about a month ago, offering movies, shows, and short-form vertical video content based on the popular stories from its main audio app. The company also plans to explore content in the anime and comics genres.
With most of its creator community contractually associated with the company, Kuku FM’s largest expense remains its marketing efforts. In FY24, the company spent Rs 102 crore on advertising, accounting for half of its total expenses. Bisu noted that while marketing costs are expected to remain stable, overall cash burn is decreasing.
Bisu co-founded Kuku FM in 2018, raising $72.3 million across five rounds. The company’s valuation currently stands at around $177 million. For comparison, Pocket FM is valued at about $750 million and has raised $197 million over six rounds, according to Tracxn data. Both startups also compete with global giants like Spotify and Amazon’s Audible in the non-music audio content space.