3one4 Capital Completes Another Exit From KukuFM, Realising ~90% IRR And Significant DPI

We are pleased to share a meaningful liquidity milestone for 3one4 Capital, following a partial exit from our holdings in KukuFM. This outcome comes on the back of Kuku’s recently announced $85 million Series C round, valuing the company at over $500 million. 

Our early investment in KukuFM was made in 2019, at a pre-consensus stage when regional language audio was still an emerging category for most investors. The partial exit has now delivered a realised IRR of ~90%, reinforcing a strong step forward in our distribution journey and validating our thesis-led approach to early-stage investing in India’s consumer internet. 

From an early Hindi MVP to a pan-India platform, Kuku has scaled into one of India’s most successful content-tech companies.

• 📈 10M+ paying subscribers and a rapidly expanding national footprint
• 📲 100M+ app downloads, establishing it as a pan-India digital powerhouse
• 💰 20x growth within 2 years in its annualised revenue run-rate
• ⚡ CAC payback reduced from 24+ months to ~4 months, driven by deliberate efficiency gains
• 🔒 90%+ of all consumption is of exclusive Kuku-owned IP, deepening differentiation and loyalty
• 🔁 Consumers spend an average of 100 minutes daily on Kuku’s platforms, showcasing clear product-market fit

This milestone is a reminder of why early conviction matters and why enduring outcomes in consumer technology come from seeing market shifts before they become consensus.

Pre-Consensus Conviction On India’s Language Internet

3one4 Capital’s partnership with Kuku began long before regional language audio and subscription-led content models became obvious opportunities. In 2019, our view was clear. India’s next generation of consumer internet platforms would be language-first, culturally rooted, and monetised through direct subscriptions. Three structural shifts enabled this thesis. Affordable smartphones were expanding the addressable market rapidly beyond Tier one cities. Low-cost mobile data was accelerating content consumption in new geographies. UPI was laying the foundation for seamless, recurring digital payments, including for entertainment. 

At the time, most investors remained focused on English-speaking urban users and advertising-driven models, often built around user-generated content. Kuku’s early signals pointed to a different future. Even with a simple Hindi MVP, Kuku saw overwhelming engagement for long-form regional storytelling, podcasts, and audiobooks across multiple verticals. Users were spending close to an hour a day listening to local language stories within the first year, a powerful indicator of habit formation and product pull. 

That engagement conviction guided our decision to back Kuku at seed, pre-revenue, and pre-consensus, with the belief that India’s language internet would create large, subscription-driven consumer platforms over time. 

Kuku’s Category-Defining Rise

India’s digital entertainment landscape has a new category challenger. Kuku, a homegrown storytelling platform, is redefining how Indian consumers discover and pay for entertainment in their own languages. Its journey from a niche audio app to a scaled platform reflects a new wave of Indian technology companies that combine cultural depth with product ambition. 

Over five years, Kuku has built one of India’s largest paid subscriber bases for digital content, supported by strong engagement and retention that compares with global benchmarks. The platform’s growth has been anchored in India-specific consumer behaviour, especially a preference for content in regional languages and a willingness to pay for it when the product solves for relevance, format, and affordability. 

The strength of Kuku’s unit economics has kept pace with its scale. Customer acquisition has become materially more efficient over time, CAC payback has compressed sharply, and retention remains best in class, supported by exclusive content that users cannot get elsewhere. 

These signals matter because they point to more than growth. They point to durability, which ultimately allows consumer platforms to define categories.

A Platform Built For Indian Language Audiences

Kuku’s execution has been grounded in a simple insight. India’s mainstream internet will be built in Indian languages, across multiple formats, and at price points that make digital spending natural for first-time subscribers. That insight shaped Kuku’s product and content strategy from the outset. 

The company has steadily deepened its focus on localisation, breadth of content verticals, and personalisation. It has also demonstrated an ability to keep pace with how Indian consumers evolve in their entertainment preferences, while maintaining a clear commitment to direct monetisation and retention. 

What distinguishes Kuku is that it did not treat regional audiences as an extension of a metro first product. It was built from the centre of the market outward, and scaled in the direction where demand was strongest but supply and product quality were historically weakest.

Strategic Moats Behind The Scale

Kuku’s rise is not accidental. It is the result of reinforcing advantages that compound with time and scale.

Deep localisation at scale

Kuku offers content across more than 14 Indian languages, enabling the platform to match linguistic nuance and cultural preferences in a way that is hard to replicate quickly. This depth has supported high engagement across diverse audiences and strengthened the platform’s ability to travel beyond a single language or geography. 

AI-powered personalisation and distribution

Kuku’s platform is underpinned by sophisticated AI that personalises content discovery for each user and optimises new content distribution. As the recommendation engine learns from user behaviour, the platform becomes more relevant, strengthening retention and guiding future content investment. 

Hybrid monetisation

Kuku has executed a dual monetisation model that blends subscriptions with microtransactions. Subscriptions provide recurring, predictable revenue from committed users. Microtransactions widen the funnel, allowing new digital spenders to experiment with low-friction purchases. This hybrid approach has supported scale without diluting unit economics. 

Exclusive content IP

Over 90% of consumption on Kuku comes from exclusive originals owned or co-produced by the company. This reduces dependence on third-party licensing, strengthens differentiation, and builds long-lived franchises that keep subscribers loyal across seasons and formats. 

These moats reinforce each other. Localised exclusive IP deepens the recommendation flywheel. Strong personalisation lifts retention. Higher retention improves lifetime value, which, in turn, keeps acquisition costs efficient. The outcome is a platform whose defensibility increases as its audience grows. 

What This Outcome Signals For India’s Consumer Internet

Kuku’s story carries significance beyond a single company. It points to India’s emergence as a creator of AI native, culturally grounded, highly monetisable consumer platforms. A decade ago, the idea that millions of Indians would pay for long-form digital content in their own languages seemed unlikely. Today, Kuku demonstrates that when products are built for local context and cultural pull, Indian consumers do pay at scale. 

This shift has broader implications. It changes the opportunity set for founders building in entertainment, learning, and other consumer categories that depend on recurring engagement. It also signals the maturation of the Indian startup ecosystem, where companies are not only adapting global models but also defining new categories rooted in India’s market realities. 

Kuku is a clear example of what happens when cultural insight and technology-first execution meet a market transition of this magnitude.

From Conviction To Outcome

This liquidity event is a valuable marker for how outcomes are beginning to look in India’s consumer internet. Platforms that earn time, trust, and payment from mainstream users are no longer edge cases. They are becoming repeatable category builders. Kuku sits in that narrow band of companies that have not only scaled engagement but converted it into durable, high-quality revenue at a national scale. That combination is still rare, and it is what makes this outcome structurally important.

For 3one4 Capital, the exit is also an expression of discipline. We will continue to realise value in line with our distribution trajectory, while staying aligned to the long-term compounding still ahead in the company. Realising value now and remaining invested for what comes next are not competing moves. Together, they balance return discipline and continued belief in that trajectory.

Kuku’s trajectory adds confidence to a broader arc we care deeply about. India is producing culturally native, technology-led consumer platforms that can set global benchmarks on product quality, monetisation, and scale. As more founders build from the centre of the market outward, this will not be an exception. It will be the shape of the next decade.

It has been our privilege at 3one4 to be a partner in Kuku’s journey. We are proud of how the founders and team have built a company that reflects the best of India’s tech talent and cultural creativity. Kuku’s story is still being written – with new chapters in AI, new content genres, and new geographies on the horizon. We believe this is just the beginning for Kuku, and we’re confident that the platform will continue to set new benchmarks for what an Indian consumer tech company can achieve. 

Here’s to many more successes for Kuku, and to India’s rising creative confidence on the global stage!

DISCLAIMER

_{The views expressed herein are those of the author as of the publication date and are subject to change without notice. Neither the author nor any of the entities under the 3one4 Capital Group have any obligation to update the content. This publications are for informational and educational purposes only and should not be construed as providing any advisory service (including financial, regulatory, or legal). It does not constitute an offer to sell or a solicitation to buy any securities or related financial instruments in any jurisdiction. Readers should perform their own due diligence and consult with relevant advisors before taking any decisions. Any reliance on the information herein is at the reader's own risk, and 3one4 Capital Group assumes no liability for any such reliance.Certain information is based on third-party sources believed to be reliable, but neither the author nor 3one4 Capital Group guarantees its accuracy, recency or completeness. There has been no independent verification of such information or the assumptions on which such information is based, unless expressly mentioned otherwise. References to specific companies, securities, or investment strategies are not endorsements. Unauthorized reproduction, distribution, or use of this document, in whole or in part, is prohibited without prior written consent from the author and/or the 3one4 Capital Group.}