Following the collapse of takeover negotiations, Koo, a social media startup that positioned itself as an indigenous competitor to X (previously Twitter), announced it will close. In a LinkedIn post on July 3, co-founders Aprameya Radhakrishna and Mayank Bidawatka revealed the news and said they are now thinking about transforming Koo’s assets into a digital public benefit to promote social interactions in local languages all across the world.
Background and Funding
Koo gained notoriety in 2021 amid the conflict between the Indian government and Twitter over removal orders pertaining to farmer protests. The platform was founded in 2019 and launched in March 2020. In November 2022, Koo broadened its scope to include Brazil, establishing itself as a major force in the social media sphere. Investors such as Accel, 3one4 Capital, Naval Ravikant, Balaji Srinivasan, and Kalaari Capital contributed $65 million to the platform.
Failed Acquisition Talks
The co-founders disclosed that despite exploring partnerships with various internet companies, conglomerates, and media houses, the talks did not yield the desired outcome. “Most of them didn’t want to deal with user-generated content and the wild nature of a social media company,” Radhakrishna and Bidawatka explained. They further mentioned that some potential partners changed priorities just before signing the deal.
Operational Challenges
The founders acknowledged that operating a social networking site entails significant technology costs, which they could not meet without further funding. “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,” they stated.
Peak and Decline
In September 2022, Koo faced its first round of layoffs, which resulted in the loss of about forty employees. More layoffs were announced by February 2023, and by April 2023, the corporation had slashed its employment by 30%, forcing several workers to resign. There was a notable decrease in Koo’s monthly active users (MAUs) from 4.1 million in January 2023 to approximately 3.1 million in April 2023. In July 2022, Koo had 9.4 million MAUs at its height.
The co-founders emphasized that at its height, Koo had about 10 million MAUs and 2.1 million daily active users. The platform’s development plans were significantly affected, despite its success, by a protracted financial winter during its peak.
Market and Financial Struggles
Koo’s financial difficulties included a high monthly cash burn, which they managed to reduce from Rs 16 crore in January 2023 to Rs 10.2 crore in April 2023. However, this was still far from their target of Rs 6.5 crore by the end of March 2023. The founders pointed out that the tough market conditions and funding challenges hindered their growth and scaling efforts.
Future Prospects
Despite the shutdown, the co-founders expressed optimism about the potential future use of Koo’s technology. They are evaluating the possibility of making Koo’s assets a digital public good, enabling social conversations in native languages worldwide. We will be happy to share some of these assets with someone with a great vision for India’s foray into social media, they said.
The closure of Koo signifies the close of a noteworthy phase in the social media environment of India. The company had to shut down due to financial difficulties and unsuccessful takeover negotiations, even though it had started out well and quickly expanded. The co-founders are still optimistic about Koo’s technology’s potential to improve social interactions in first languages across the world’s digital landscape.
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