9APRIL 2024TOP STORIESPOCKET FM RAISES $103 MILLION IN ITS SERIES D FUNDING ROUNDHINDUJA GROUP SEEKING CAPITAL FROM JAPANESE BANKS FOR ACQUISITION ASSISTANCEPocket FM, a prominent audio entertainment platform, has successfully raised $103 million in its Series D funding round, led by Lightspeed, with participation from Stepstone Group. With this latest round, Pocket FM's total funding to date amounts to $196.5 million.The infusion of new capital will play a crucial role in Pocket FM's expansion into the U.S. market and will also support its global expansion plans into Europe and LATAM markets slated for 2024.A significant portion of the new funding will be allocated to strengthening Pocket FM's exclusive content library and bolstering its IP playbook by providing a platform for writers to share their unique and untold stories.The company has achieved remarkable financial milestones, surpassing $150 million in annualized revenue run rate (ARR) worldwide, with revenue growing at an impressive rate of 57 percent quarter-over-quarter (QoQ). Notably, Pocket FM has exceeded $100 million in ARR in the U.S. market since its launch in Q4 of 2022. U.S. audiences spend over 135 minutes daily on the platform, with approximately 10 million registered users in the country.Pocket FM has outlined an AI-led strategy focusing on automation, content curation, production, and distribution. The company intends to leverage generative AI to scale its entertainment content offerings and develop AI-powered personalized recommendations to enhance the overall user experience.Rohan Nayak, CEO and co-founder of Pocket FM expressed enthusiasm about the company's trajectory, stating, "We identified an unexplored space in the entertainment industry driven by increasing demand for audio fiction and crafted a playbook to address this opportunity across every key market. Our robust content library of audio series and strong consumption behavior on the platform are shaping the future of entertainment." He added, "Our focus remains on tapping into unique and exclusive stories to solidify our leadership in this emerging category and create a strong IP playbook. This latest funding validates our vision and the possibilities we bring to disrupt the industry." IndusInd International Holdings Limited (IIHL), a Hinduja group company, is seeking to raise up to 8,000 crore from Japanese banks to finance its bid for Reliance Capital, formerly owned by Anil Ambani. The move comes ahead of the May 27 deadline set by a bankruptcy court to finalize the deal. IIHL's approach to Japanese banks is seen as a strategic move to secure financing at potentially lower interest rates, leveraging Reliance Capital's association with Nippon Life, a joint venture partner.The discussions with Japanese banks, including Mizuho, SMBC, and MUFG, center around securing five-year loans at an interest cost of 8-9 percent per annum. This would represent a significant reduction in interest rates compared to other lenders, potentially providing cost-effective financing for the acquisition. However, the funding arrangements are yet to be finalized.The Hinduja group had previously explored raising $1 billion from global private credit funds, but the interest rates offered by those sources were relatively high, at 15-16% per annum. By tapping into Japanese banks, IIHL aims to secure more favorable terms for financing the acquisition of Reliance Capital.While IIHL may raise a significant portion of the required funds through this new financing route, the Hinduja family may need to inject additional equity to bridge any funding gap. The Hinduja group did not respond to queries regarding the matter, while Mizuho's executives were unavailable for comment, and MUFG and SMBC declined to comment.Japanese financiers have been increasingly active in India, demonstrating a greater appetite for risk and providing funding for local businesses. Japanese banks have previously financed Indian corporates with foreign currency loan requirements, but their involvement in local financing has been expanding. Recent investments by Mizuho, MUFG, and SMBC in their Indian operations highlight their commitment to the Indian market and their willingness to provide substantial funding to support business activities.
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