Audio entertainment startup Pocket FM has started discussions to shift its holding structure back to India as it explores a potential domestic public listing, people aware of the matter told ET.
The company, currently housed in the US, will need to complete the reverse flip before filing for an initial public offering in India. Such a move involves bringing the holding company of an overseas-domiciled startup back to India, aligning the corporate structure with its main operating market and listing plans.
The plan comes at a time when Kuku Technologies, the parent of rival audio and video content platform Kuku FM, has taken a formal step towards the public markets. ET had reported earlier this month that Kuku Technologies has confidentially filed draft papers with the Securities and Exchange Board of India for a Rs 3,500-crore IPO, targeting a valuation of around Rs 15,000 crore.
“Kuku’s filing has sharpened the focus on India’s audio and mobile-first storytelling market, where companies are trying to scale paid content models across audio series, video-led storytelling and microdramas,” said one of the sources cited above.
Kuku had raised $85 million last October in a funding round led by Granite Asia, valuing the company at around $550 million post-money.
Fundraising parleys
Pocket FM has also been in talks with private market investors to raise fresh capital of about $150 million, they said. The round is important as reverse flips typically involve tax and structuring costs, besides expenses linked to IPO preparation.
The discussions have not yet resulted in a closure, sources said. Investors who have evaluated the company have sought details on its revenue quality, repeat user behaviour, content costs, monetisation trends and customer acquisition payback period, they said.
Dutch technology firm Prosus and Abu Dhabi’s sovereign wealth fund ADIA have been among the investors that held discussions with Pocket FM, but these talks did not move forward to a transaction, one of the people said.
Pocket FM had first discussed raising funds from ADIA in March 2024, ET reported, but even back then, the deal had not gone through.
Pocket FM and ADIA declined to comment. Prosus had not responded to ET’s queries at the time of publishing.
Pocket FM’s listing plans are also coinciding with changes in its finance function.
Last month, Pocket FM also partnered with hiring platform Quess Corp to move about 2,000 contractual employees, including designers and content writers servicing its US business, to the latter's payroll. Typically, staffing companies like Quess Corp, charge a fee, which is around 3-4% and is billed monthly. This is primarily done to consolidate costs and streamline balance sheets.
The company has also seen senior-level churn and a workforce restructuring in recent months. ET reported last month that Pocket FM had laid off around 100 employees, or about 10% of its workforce, across content, technology and product. It also moved nearly 2,000 contractual workers, including designers and content writers, to Quess Corp’s payroll.
Financials
However, Pocket FM has continued to report strong growth metrics. In April, the company said it had touched $450 million in annual recurring revenue, helped by AI-led content creation. Parent Pocket Entertainment reported Rs 1,768 crore in FY25 revenue, up 68% from the previous year.
The company operates through a microtransaction-led model, where users pay to unlock episodes and content. Investors evaluating the company are looking at whether this model can support sustained growth as the business moves closer to public-market scrutiny, people aware of the discussions said.
The reverse-flip push also comes amid a broader shift among Indian startups to bring overseas holding structures back to India ahead of domestic listings. PhonePe, Groww, Pine Labs, Razorpay, Zepto and Meesho have either completed or initiated such moves as Indian public markets become the preferred listing venue for large consumer internet and fintech companies.
