Zencastr - Shopify for Podcasts

Company & Team Introduction

Zencastr makes it easy for anyone to create, grow, and monetize a podcast. The company's humble beginnings date back to 2015 when CEO Josh Nielson started Zencastr to help podcasters grow and monetize their passions after realizing just how cumbersome it was to build a high-quality podcast. Over the years, Zencastr has built a comprehensive suite of products to do exactly that. Prior to starting Zencastr, Josh was a Developer in Residence for TechStars Boulder and held various engineering roles. In 2019, he bought on his co-founder Adrian Lopez, an early engineer at Flipagram, which was later acquired by TikTok. Zencastr is based in Salt Lake City, Utah and has grown its team to ~22 employees.

Product Overview

Zencastr is a leading cloud-based podcasting platform that initially started as a simple solution to solve a common audio quality issue podcasters faced: saving each guest’s raw audio in local storage before uploading it to its cloud service to maintain its quality. Over the years, Zencastr has transformed into a full-stack creator platform spanning the entire podcasting process: recording, producing, hosting, analyzing, and monetizing. Some of the platform's key features include the ability to record video in 4k and audio in 16-bit 48k WAV. The live soundboard feature allows creators to add audio clips like ads and intros live as they record. The postproduction software enables creators to adjust the loudness of the podcast, reduce background noise, and automatically remove “ahhhs” and “ummms” from recordings. Zencastr also offers additional features like unlimited audio distribution and Video RSS, which makes it easy to distribute your podcast to all the different platforms. There is also a suite of analytics to help creators understand their audience by giving data such as where users are listening from, what platform they listened on, when they are listening, and listener retention breakdowns. For monetization, Zencastr has built its creator network to help connect podcasters with advertisers. Another crucial aspect of Zencastr is its user-friendliness, as the platform must be intuitive not only for the host but also for guests who may have never done a podcast before.

Total Addressable Market

Over the past five years, the podcasting industry has exploded into the forefront of the creator economy. According to research from Polaris Market Research, the podcasting industry was already as large as $13.70B in 2021. Their research also forecasts strong growth in the coming years: The market will grow at a 31.5% CAGR through 2030, expanding Zencastr's potential addressable market to an enormous $149B by 2030.

Business Model & The Numbers

Zencastr has two revenue streams: advertising + a simple 4-tier subscription pricing model. Their “Professional” tier starts at $20/month and gives access to unlimited recordings & masters storage, unlimited transcriptions, 1080P video, unlimited audio hosting and 10 postproduction credits. For high-frequency creators wanting to take their podcast to the next level, Zencastr offers a “Growth" tier starting at $49/month, which unlocks additional functionality, including an AI clip profile with automated uploads to socials, 4k video, the ability to host multiple shows and have multiple team members, access to brand management tools, and 20 post-production credits. For larger customers, Zencastr offers their “Thought Leader” tier, which allows larger teams to succeed on the platform with 50 post-production credits, up to 5 shows, 4 team members, and 2 AI clip profiles. For advertising, Zencastr takes a 40% cut of all ads generated through its network. The company disclosed their 2021 financials as required due to crowdfunding regulations, revealing some impressive metrics, including 2M ARR + 221k in advertising revenue with direct-sold ads up 12x YoY, 157% YoY growth overall and strong gross margins at 70%+.

Traction

Far from an overnight success, Zencastr has slowly but surely brought on some of the biggest creators and businesses in the world to their platform. Netflix, Spotify, Adobe, CBS, and The Guardian rely on Zencastr to power their podcasting efforts. The company has also attracted some big-name advertisers for their advertising network, including AG1, Magic Spoon, BetterHelp, Babbel, and credit.com. At the time of the crowdfunding round, Zencastr had a dominant position in the industry, with ~15% of the entire podcasting market using Zencastr. The company now has over 33k podcasters using its platform, including over 8600 paid users.

Competitors

The explosion in podcasts over the past five years has turned the once-niche industry into a central pillar of the creator economy. With such a significant market opportunity, competition has followed suit. Here is a breakdown of Zencastr’s main competitor, Riverside.

Riverside.fm—Founded in 2020 by brothers Gideon and Nadav Keyson, Riverside offers similar features to Zencastr, including 4K video recording, automated short-form clips, transcriptions, and post-production editing. However, Riverside and Zencastr deviate in their approach to the market; Zencastr wants to be an end-to-end platform spanning recording, production, distribution, analytics, and monetization, whereas Riverside is focused solely on recording. Riverside has an impressive customer list, including Microsoft, Marvel, Netflix, The New York Times, and Business Insider. The company has raised a total of $47M in funding, including an enormous $35M Series B from an elite group of investors, including Oren Zeev, who led the round, with participation from Seven Seven Six and Lachy Groom. The company is headquartered in Tel Aviv, Israel and has grown its team to ~175 employees.

Funding

After bootstrapping the company for years, the team at Zencastr realized they were in a prime position to become a dominant player in the booming podcasting industry, raising a $4.6M seed round in early 2021 to help them capitalize on the opportunity and fuel further growth. Kickstart Fund spearheaded the funding, and other participants in the round included additional firms such as Forward Venture Capital, as well as angels like Austen Allred (Founder, Bloom Tech), Justin Sun (Co-Founder, Lucid), Jeremy Andrus (CEO, Traeger Grills), Harrison Wang (Founder, Unblocked), Farhad Mohit & Brian Dilley (Founders of Flipagram, acq. by TikTok), Nimesh Kampani (Founder, 108 Capital), Aaron Skonnard (Co-Founder, PluralSight acq by Vista Equity for $3.5B). To strengthen their already tight-knit creator community, Zencastr raised a $560k round of equity crowdfunding in 2023 to allow their podcasters to participate in the upside of their platform and further strengthen their community, with over 1000 investors participating in the round.