Homegrown microblogging startup Koo on Wednesday announced the discontinuation of its services. In a LinkedIn post, its co-founders Aprameya Radhakrishna and Mayank Bidawatka said that at the company’s peak, Koo used to have 10 per cent like ratio, which was 7-10x the ratio Twitter had, and was “just months away from beating Twitter in India in 2022”.
During its peak, Koo was the main rival of Twitter, whose name was changed to X after Elon Musk acquired it in 2022.
Why Has Koo Decided To Shut Down Its Operations?
Koo said the company will discontinue its service to the public as its partnership talks failed.
“We explored partnerships with multiple larger internet companies, conglomerates and media houses but these talks didn’t yield the outcome we wanted. Most of them didn’t want to deal with user generated content and the wild nature of a social media company,” Koo’s co-founders said in a statement on LinkedIn.
A couple of them, the founders said, changed priority almost close to signing.
Why Was Koo Looking For Partnerships?
After the coronavirus pandemic, most tech companies faced a cash crunch from 2022 onwards due to funding winter. Koo was also hit by that. During the period, the company also laid off nearly 40 employees. Subsequently, in 2023 also, the company cautioned employees for more layoffs.
It happened due to a capital crisis at the company.
“A prolonged funding winter which hit us at our peak hurt our plans at the time and we had to tone down on our growth trajectory,” Aprameya Radhakrishna and Mayank Bidawatka stated.
Social media, the co-founders said, is probably one of the toughest companies to build even with all resources available as you need to grow users to a significant scale before one thinks of revenue.
Koo could have easily scaled internationally and given India a global brand that was truly made in India. “The company needed 5-6 years of aggressive, long-term and patient capital to make this dream a reality,” they said.
On the winddown of the company, Aprameya and Mayank said, “While we would have liked to keep the app running, the cost of technology services to keep a social media app running is high and we have had to take this tough decision.”
Koo’s Peak
Koo said it built a globally scalable product in a fraction of the time that X/ Twitter did, with superior systems, algorithms and strong stakeholder-first philosophies.
Koo used to have a 10 per cent like ratio, almost 7-10x the ratio Twitter had – making Koo a more favourable platform for creators, the co-founders said.
At our peak, we were at about 2.1 million daily active users and ~ 10 million monthly active users, 9000+ VIPs, which included some of the most eminent personalities from various fields. We were just months away from beating Twitter in India in 2022 and could have doubled down on that short-term goal with capital behind us, according to Aprameya and Mayank.
“We were just months away from beating Twitter in India in 2022 and could have doubled down on that short-term goal with capital behind us,” he added.
It has been a long journey of over 4 years from thought to finish. The company has its highest highs and lowest lows while running Koo, they said.
“Patient, long-term capital is essential to build ambitious, world-beating products from India — be it in social media, AI, space, EV or other futuristic category,” the co-founders said, adding that it will need a lot more capital when the space has a global giant already.
These are not to be looked at as profit-churning machines in two years from launch, they added.
Koo’s Financial Overview
Koo did manage to reduce its monthly cash burn to around Rs 10.2 crore in April 2023, from roughly Rs 16 crore in January 2023, according to a Moneycontrol report earlier.
The monthly cash burn of Rs 10.2 crore in April 2023, however, is far from the target of Rs 6.5 crore Koo had set for itself by March-end of that year.
The Tiger Global-backed company had raised $65 million so far from Accel, 3one4 Capital, Naval Ravikant, Balaji Srinivasan, Kalaari Capital and several others.
