We are fast approaching half a billion people listening to podcasts, and today one of the independent players hoping to cash in on that activity has announced some funding to grow.
Podimo, the Copenhagen-based podcasting startup that’s built around a Netflix-style monthly subscription fee, has raised another €44 million ($48 million at today’s rates) in funding, an all-equity round that it will be using to expand across the whole of its business: It will be enhancing 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 the plan is to add more countries to that list.
The funding comes after a year that has seen Podimo’s average engagement per user rise to 20 hours per month, and its subscription base grow by 80% — although in an interview, Morten Strunge, the CEO and founder, declined, several times, to disclose an actual subscriber number. He said there are around 350 shows published weekly, with only around “a handful” of creators making multiple shows, meaning it has around 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 prior to this round, the company had raised just over €200 million. (The last round, just over a year ago in September 2022, was just over €58 million.)
Strunge declined to disclose valuation, but for some further context on that he confirmed it was an upround, and that the company is now profitable in its home market of Denmark and is focusing on getting into the black everywhere else. (For what it’s worth, the last estimate on PitchBook was $240 million, but since that figure now precedes the last two funding rounds, it’s not a very accurate guide here.)
Podimo’s funding and traction are coming at a tricky time for the podcasting industry. While there are clear signs of the audience of listeners growing, for those hoping to make a business out of podcasting — “those” includes both the companies building podcasting platforms and tools, as well as creators — the numbers still might not be adding up.
In September, the WSJ wrote an illuminating piece about how the odds appeared stacked against Spotify’s $1 billion bet on podcasting, a figure that included a host of exclusive (read: expensive) deals with high-profile names, its platform investments and more. Earlier this year, Google decided to shut down its standalone podcasting app and fold operations into YouTube: a signal that it’s still looking for the right formula to be a hit player in the space. And in June, it emerged that SiriusXM would shut down Stitcher, one of the most longstanding, iconic names in podcasting, just three years after buying it.
One notable detail about Podimo in that context is that it remains an independent offering, separate of any larger platform play, and that potentially gives it more agility, but also a risk of getting crowded out by the business priorities of those bigger operations. After all, it still relies on other platforms both for direct distribution (as an app), and indirectly (to cross-post pods for its creators, to promote them and more).
Strunge believes that Podimo’s position 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 within it, by way of Podimo’s own ad business, one of several acquisitions it has made over the years); distribute it on Podimo itself; use the platform to distribute that content to other podcasting platforms; and then gather and read metrics on all of that activity.
The plan will be to take this model further, Strunge said, with a focus on ever-more “hyper local” content. That will include producing more content in different languages, and providing more localized information to people.
The localized nature, he added, is one reason why advertising in podcasts is so tricky. “More than 90% of consumption comes in native languages today,” he said. “So you have a fragmented supply side. The media industry still has difficulty with scale when serving that.” (And for the record, Podimo has no plans in the immediate future to introduce advertising-based tiers, reducing or removing subscription rates, he said.)
Content, meanwhile, still has a lot of room for innovation, in his opinion. The company has recently started building out what he described as short-form podcasts: six- or seven-minute news updates customized for local markets, not unlike news briefs that you might get on traditional radio.
If the model is to move closer to what is already out there in the market, the big challenge will be to continue differentiating itself and whether it can do so on a profitable basis. And competition is not letting up. Taking just two recent examples, Spotify is now working with OpenAI to create automatic translations of podcasts, and Apple is expanding its many creator tools.
“Our investment in Podimo fits directly into EIFO’s strategy to contribute to maintaining strong tech companies in Denmark. At the same time, the investment supports our 2024 strategy of making more growth investments in the late phases,” said Jacob Bratting Pedersen, partner in tech and industry investing in EIFO, in a statement. “We see in Podimo a tech company with big ambitions, and with a super professional team behind it, which can execute on the powerful, 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 large today, only looks set to get even bigger quickly.”
Updated to correct details on creator pricing.