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

The shift is part of a broader move by generative AI into content production, but Pocket FM still relies on human creators for ideas and storytelling, 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 approach focuses on building AI tools around the creative process rather than generating content autonomously, the company said.

AI head Vasu Sharma, a former Meta and Tesla scientist, told TechCrunch that the startup has trained its own models for tasks including creative writing and text-to-speech, drawing on years of production data and signals about how listeners engage with stories. Economics have driven the push. Nayak said AI has made content production about 80 times cheaper, and that 100 hours of content that previously took about a year to produce can now be made in a day.

The technology has also increased output. More than 550,000 creators on Pocket FM are producing about 2.5 million hours of AI-powered content a year, Nayak said. Two years ago, the startup’s entire catalog was about 100,000 hours. The platform has built a library of more than 770,000 audio series. Nayak said the larger content supply has helped retention, with the 12-month revenue retention rate rising to 76% from 44% two years ago, partly because more stories are available to match listener preferences.

Pocket FM’s annualized revenue run rate was about $250 million a year ago, then climbed to $430 million in April and $500 million now. The startup calculates the figure by multiplying monthly revenue by 12, rather than using contracted recurring revenue, Nayak explained. The growth came as Pocket FM increased 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. About 96 titles on its platform have generated more than $1 million each in revenue, including 13 that have crossed $10 million, the company said.

Pocket FM now has more than 250 million listeners across more than 20 countries, starting from India as its primary market. The U.S., which grew about 70% over the past year, is its largest market and accounts for about 70% of its annualized revenue run rate. Nayak said about $85 million of the annualized revenue comes from ads, while roughly $415 million comes from users paying to unlock individual episodes.

The parent company, Pocket Entertainment, is looking to take the 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. Pocket Saga 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 company is also using successful Pocket FM audio stories to create AI-generated videos for Pocket Saga, with no traditional live-action production.

Pocket Entertainment plans to enter at least two more entertainment formats over the next five years, and aims to turn successful stories from its platforms into books, television and movies through licensing deals. The Bengaluru- and Culver City, California-based company 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.

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. Nayak told TechCrunch that Pocket Entertainment does not plan to go public in the next 24 months, though it is keeping its options open for an eventual listing in either India or the U.S.

Editor's Summary Pocket FM has doubled its annualized revenue run rate to $500 million as AI now powers 93% of its catalog and 99% of new content. The company says AI has cut production costs and expanded output while human creators still shape ideas. Its parent is testing AI-only microdramas and holding fundraising talks, but says no IPO is planned in the next 24 months.