Why are VCs betting on KuKu FM?
The inside story behind Bharat focused audio app.
Welcome to the 184th edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 94,400+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more
Kuku FM raised ₹207 Cr a few days back. It’s a Bharat-focused audio platform with a subscriber-only business model that makes ~ ₹70 Cr /yr. While every 2nd founder cribs about "Bharat users don't pay", why are VCs betting on KuKu?
Quick history lesson 📚
In 2018, KuKu FM started with podcasts only - didn't work. Then they pivoted to full books, book summaries, courses & stories & it has worked like a charm.
The insight - everything is in 7 Indian languages 🤯
Same reason why Netflix has taken dubbing seriously in India. No wonder, some of their new shows are available in 7 Indian languages → Hindi, Marathi, Bengali, Tamil, Telugu, Kannada, and Malayalam.
But, that's not the only insight ✨
KuKu FM understood how TV series are successful in India →They’re episodic & released every single week "Saas Bhi Kabhi Bahu thi", "Sasural Simar Ka" & thousands of them on the typical family TV channel.
Plus, no successful Indian TV series is fictional. They all try to give escapism/relatability to the Indian Janta. And, the prime-time TV show timings are designed for when most Indian households are resting after a day of work.
Why are VCs betting on Kuku FM?
First/ it attacked the right habit 🕣
Audio is great when users can't watch their smartphones/TVs. The product is designed to replace an existing habit - listening to music. But, you can't keep listening to music every day, it gets boring for most.
Second/ make users feel productive ✨
This is consistent with the number of KuKu FM users adopting self-help and audio courses - an extremely smart move. The idea is not to be an educational company but to be a product that makes users feel - 'productive'.
Third/ clear distinction from YouTube 🇮🇳
No one can compete with the Google giant on variety and depth of content, anyone saying otherwise is outright blind. KuKu FM's right to win isn't variety - it's building content in Indian languages. And, it's doing an extremely good job.
Fourth/ creators who aren't full-time 💸
KuKu FM built its own creator economy of 30,000 people who build content with them on a project basis. These are first-time creators who don't have the means/ patience to make it on YT/Spotify because their genre might lack scale/discovery.
Fifth/ the right 'aspirational' positioning ⭐️
It's interesting - take a look at some of the Bharat content on OTT (say altBalaji) which focuses on steamy content to gain rapid growth. KuKu is doing exactly the opposite. It wants to position itself as a thing you do to sound cooler in your social circle - it's the same logic Dream11 used when it started.
Btw, I previously wrote something on how the 28% GST will kill Dream11 and other Real money gaming companies in India.
No wonder VCs are investing the big buck 💸
Audible India recorded a 40% growth in its paid user base this year. Its global revenue is predicted to get to 35 Billion by 2030 - and that's largely English. VCs bet on KuKu FM is it's bound to be India's Audible - too hard to ignore.
That’s all for now.
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Hi Abhishek, Thanks for the informative article!!
While I agree on all the points you covered, i think that you could have included a point related to the stong marketing that Kuku FM employed. Every other educational Indian YT channel had a referral code for Kuku FM which helped increase the customer base.