Koo recorded a net loss of INR 244 crore between FY20 and FY22, with only INR 21 million in revenue. The platform’s downfall was mostly brought on by a decline in users and its inability to obtain finance during a difficult financial winter. VerSe’s acquisition negotiations also collapsed, which ultimately resulted in Koo’s closure.
The Rise and Fall of Koo: An In-Depth Look
When the Covid-19 pandemic peaked in 2021, Koo, a domestic microblogging network, looked like it would succeed. Koo, which was founded by Aprameya Radhakrishna and Mayank Bidawatka, co-founders of TaxiForSure, attracted a sizable user base of Indians with its eye-catching yellow bird logo and strong vernacular appeal.
Early in 2021, Koo’s ascent was further aided by the encouragement of then-IT Minister Ravi Shankar Prasad. Investors flocked in, and by June 2022, Koo had raised more than $50 million, reaching a $285 million high valuation. With over 9 million monthly active users, the network appeared to have a promising future.
However, fast forward to July 2024, and Koo has shut down, becoming the latest casualty in India’s social media landscape. In a LinkedIn post on July 3, the co-founders announced, “Here’s the final pause from our end… While we would’ve liked to keep the app running, the cost of technology services to keep a social media app running is high and we’ve had to take this tough decision.”
Financial Struggles and User Decline
Koo saw early success, but his financial situation rapidly worsened. Between FY20 and FY22, the platform recorded a net loss of INR 244 crore, with only INR 21 lakh in income throughout that time. Expenses increased dramatically, almost doubling to INR 24.77 crore in FY21 and soaring to INR 202 crore in FY22, a 741% increase. The company’s problems were made worse by the non-filing of the FY23 and FY24 financials.
An even bigger financial setback was a sharp decline in user engagement. From 7.2 million in June 2023 to 2.7 million in February 2024, the number of active users fell by 62%. Advertisers started to leave the network as user traction declined, severely impairing the platform’s revenue source.
The Competitive Landscape and Lack of Differentiation
Koo’s troubles were compounded by its inability to offer a competitive advantage over its rival, Twitter (now X). Despite introducing subscription models like Koo Premium, priced between INR 6 and INR 30 per month, the platform failed to attract and retain users. According to Nishant Mittal, a former social media platform founder, “The biggest issue with Koo is that it does not offer any differentiation nor does it want to simply be a copy of X. This could be a good college project, not a serious business to count on.”
Funding Winter and Acquisition Talks
The most significant blow to Koo was its failure to secure additional funding amid a harsh funding winter. Despite raising over $50 million since its inception, the platform found no takers for its Series C round. An angel investor revealed that the financials were “not impressive enough” to attract new investors.
Co-founder Bidawatka said that Koo had to change its emphasis from expansion to revenue generation by the end of 2023 because of the difficult market conditions. Koo was also hurt by the unexpected surge in popularity of Meta’s Threads, as users flocked to the new platform.
Koo started to fire workers in an effort to stay afloat. It started with 5% of the workforce and eventually stopped paying salaries altogether in April 2024. Reports that Dailyhunt and Josh’s parent company VerSe were in talks to purchase Koo momentarily gave rise to hopes. But these negotiations broke down fast, and Koo was left without the money to continue operating.
The Final Shutdown
On July 3, 2024, Koo officially announced its shutdown, leaving many employees without jobs. The platform’s downfall highlights the broader challenges faced by Indian social media startups, such as Trell and Roposo, as they navigate a tough funding environment.
Koo is now the fourth funded Indian startup to shut down in 2024, following Nintee, GoldPe, and Muvin. The ongoing funding winter continues to cast a shadow over the startup ecosystem, with many hoping for a turnaround.
As Koo’s story comes to a close, attention turns to what Radhakrishna and Bidawatka will do next. Despite its initial promise, Koo’s journey serves as a cautionary tale for startups aiming to challenge established players without a strong financial and strategic foundation.
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