Wang Xiaoyu literally bet the house on making her startup work, quitting a lucrative job at Google in late 2015 and selling her home to build a podcast app. Two years on, she still sleeps in shifts on a communal bed at her Beijing office and has yet to take a day off. But her company, CastBox.FM, has completed a $12.8 million funding round backed by the likes of IDG Capital and GSR Ventures, early investors in local giants Xiaomi Corp and Didi Chuxing. It has more than 1.5 million monthly users and is one of the best-reviewed of its kind in Google’s Play store.
“I don’t have any hobbies outside of work,” the 30-year-old said in CastBox’s Beijing office. “I really want to make an impact, beyond that where I live and how much I make is not so important.” Unlike many apps designed for Chinese audiences, CastBox’s interface is devoid of clutter with a strong resemblance to Apple’s App Store. The landing page features content recommended to each person’s tastes but the new feature that helps it stand out is in the search bar.
Listeners have traditionally been limited to entering key words that appear in the titles of episodes, but CastBox’s latest feature transcribes popular podcasts within hours of their release so users can hunt through the words spoken. For example, typing “bull in the China shop” finds a colorful discussion of US President Donald Trump about 19 minutes into an episode of ‘Pod Save America.’ Click the link and the audio plays from 30 seconds before the relevant quote.
Even before the feature was released, CastBox had raised a total of $16 million and unlike most Chinese companies, its success has been generated abroad with Europe and the US its biggest markets. The app has been downloaded 7 million times. In Google’s Play store it’s in similar company to rivals Stitcher and Podcast Addict, which have both been downloaded between 5 million and 10 million times there.
Wang decided to get into the business while stationed in Tokyo, where she would listen to podcasts in Japanese, English and Chinese. From inside Google, she could see a spike in user searches for podcast content and saw there wasn’t a dominant app.
After moving back to China, the workaholic set about building the business. Wu Jing of backer Qiming Venture Partners said that one time she sent CastBox a late night message and Wang replied almost instantly, with the same happening early the next morning.
“She’s got a strategy for trying new things, a good strategy for exploring new things and a passion that attracts talent,” said Jason Zhen, a partner at IDG Capital who backed the latest funding round. While podcasting has been around for more than a decade, few made money from it in the early years. Where just 27 percent of Americans over the age of 12 had ever listened to a podcast in 2013, that figure hit a record high of 40 percent this year, according to an Edison Research report.
The medium is now attracting advertisers with an industry survey of the 20 largest podcast ad companies by PricewaterhouseCoopers LLP predicting in June that revenue this year would rise 85 percent to $220 million. Vijay Solanki, chief executive of Interactive Advertising Bureau Australia, said that while podcasts remained a small portion of the media market, it’s growing rapidly – driven by smartphones, Amazon Echo-style speakers and in-car digital radios.
“This is just the beginning of the journey,” he said. “If you’ve got the data you know exactly who the listeners are and where they are – let’s not underestimate the power of location-based data with podcasting.” CastBox faces plenty of competition, from Apple’s own dedicated app to a renewed push by Google. The search giant this week bought 60dB, which also provided personalized content. US-based company Audiosear.ch sells technology needed to text-search through podcasts to developers and publishers.
But Megan Brownlow, a PricewaterhouseCoopers Australia partner, said demand for content from listeners and advertisers is rising so strongly that there is space for new players. To hit its target of 10 million monthly active users within 12 months, CastBox is signing up exclusive content deals, offering Spotify-style revenue sharing. It also promises to help publishers better understand what makes their audience tick. The company was breaking even with banner ads until switching them off to improve the user experience – the result is an app with a 4.7 out of 5 rating in Google Play.
SIG Venture’s Yaning Gao says CastBox needs to secure a bigger base before rivals can steal its technology advantage. It’s a similar strategy adopted by SIG’s other sleeper hit Jinri Toutiao, which turned the business of news aggregation into a $20 billion company as internet giants ignored the segment. “As long as CastBox can hit 10 million monthly active users by the end of next year I think they’ll be safe,” Gao said.