We are fast approaching half a billion people listening to podcasts and today one of the independent players hoping to cash in on this activity announced some funding to grow.
Podimo, the Copenhagen-based podcasting startup based on a Netflix-style monthly subscription, has raised another €44 million ($48 million at today’s prices) in funding, an all-equity round that it will use to expand across its entire business. : will enhance production tools. expanding its distribution network alongside its own platform; and going deeper into localization.
Podimo is currently available in Denmark, Norway, Germany, Spain, the Netherlands, Finland and Latin America — where it charges between $5 and $7 per month to listeners and higher prices to creators to use the tools of — and the plan is to add more countries to that list.
The funding comes after a year that saw Podimo’s average engagement per user grow to 20 hours per month and its subscription base grow by 80% — though in an interview Morten Strunge, the CEO and founder, declined many times to reveal a real subscriber number. He said there are about 350 shows published weekly, with only “a few” creators making multiple shows, meaning he has about 350 creators using the platform today.
The Danish Export and Investment Fund (EIFO) is leading the round, with HighlandX and Augustinus Fabrikker also participating. Strunge said that before this round, the company had raised just over €200 million. (Last round, just over a year ago September 2022it was just over 58 million euros.)
Strunge declined to disclose the valuation, but for some further context on it: he confirmed that it was an uptrend and that the company is now profitable in its home market of Denmark and is focused on getting into the black everywhere else. (For what it’s worth, the latest estimate on PitchBook was 240 million dollars(but since that number predates the last two funding rounds, it’s not a very accurate guide here.)
Podimo’s funding and traction comes at a difficult time for the podcasting industry. While there are clear signs that the listenership is growing, for those hoping to make a business out of podcasting—“they” include both the companies that build podcasting platforms and tools, as well as creators—the numbers may not add up.
In September, the WSJ wrote an illuminating piece about how the odds appeared stacked against Spotify’s $1 billion bet on podcasting, a number that included a series of exclusive (read: expensive) deals with high-profile names, investments in its platform, and more. Earlier this year, Google decided to shut down its standalone podcasting app and fold its operations into YouTube: a sign that it is still searching for the right formula to become a successful player in the space. And in June, it emerged that SiriusXM would close Stitcherone of the longest-running, iconic names in podcasting, just three years after its purchase.
A notable detail about Podimo in this context is that it remains an independent offering, separate from any larger gaming platform, and this potentially gives it greater flexibility, but also the risk of being sidelined by the business priorities of these larger enterprises. After all, it still relies on other platforms both for direct distribution (as an app) and indirectly (for cross-posting its creators, promoting them, and more).
Strunge believes that Podimo’s status as a “one stop shop” helps it stand out from the rest of the podcasting fray. Creators can use the platform to produce content (and include “native” advertising on it) through Podimo’s ad business, one of several acquisitions has done over the years) to distribute it to Podimo itself. use the platform to distribute this content to other podcasting platforms. and then collect and read metrics for all that activity.
The plan will be to take that model further, Strunge said, with an emphasis on increasingly “hyperlocal” content. This will include producing more content in different languages and providing people with more local information.
The local nature, he added, is one reason why advertising on podcasts is so difficult. “More than ninety percent of consumption is in native languages today,” he said. “So you have a fragmented supply side. The media industry still struggles with scale when it comes to serving it.” (And for the record, Podimo has no immediate plans to introduce ad-based tiers, lowering or removing subscription rates, he said.)
Content, meanwhile, still has a lot of room for innovation, in his opinion. The company recently began creating what it described as short-form podcasts: six- or seven-minute news updates tailored for local markets, not unlike the condensed news you might get on traditional radio.
If the model is going to come close to what already exists in the market, the big challenge will be to continue to differentiate and whether it can do so on a profitable basis. And the competition is not abating. Taking just two recent examples, Spotify is now working with OpenAI to create automatic podcast translations. And Apple is expanding its many creator tools.
“Our investment in Podimo fits directly into EIFO’s strategy to help retain strong technology companies in Denmark. At the same time, the investment supports our 2024 strategy to make more late-stage growth investments,” said Jacob Bratting Pedersen, a technology and industrials investing partner at EIFO, in a statement. “We see in Podimo a technology company with great ambitions and a super professional team behind it, which can execute the strong, international expansion plan. In addition, the podcast market is favored with an underlying growth of an expected 32 percent annually for the next several years. So the market, which is already big today, looks set to get even bigger quickly.”
