Homegrown startup Koo announced on Wednesday that it will cease its operations. Co-founders Aprameya Radhakrishna and Mayank Bidawatka revealed on LinkedIn that at its peak, Koo boasted a 10% like ratio, significantly higher than Twitter’s, and was “just months away from beating Twitter in India in 2022.”
At its zenith, Koo was the primary competitor to Twitter, which was rebranded as X after Elon Musk’s acquisition in 2022.
Reasons Behind Koo’s Closure
Koo attributed the decision to shut down to unsuccessful partnership negotiations.
“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,” the co-founders stated on LinkedIn. They also mentioned that a couple of potential partners shifted their priorities just before finalizing deals.
Why Koo Sought Partnerships
Following the coronavirus pandemic, many tech firms experienced financial difficulties due to the funding winter from 2022 onwards, impacting Koo as well. During this period, the company laid off nearly 40 employees and warned of more layoffs in 2023 due to a capital crisis.
“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,” stated Radhakrishna and Bidawatka. They emphasized that social media companies require significant user growth before revenue generation can be considered, making it a challenging sector to succeed in even with ample resources.
Koo had the potential to expand internationally, creating a global brand from India. However, “The company needed 5-6 years of aggressive, long-term and patient capital to make this dream a reality,” they explained.
On the decision to wind down the company, the co-founders stated, “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 Achievements
Koo developed a globally scalable product with superior systems, algorithms, and stakeholder-first philosophies in a fraction of the time it took X/Twitter.
The platform’s 10% like ratio was significantly higher than Twitter’s, making Koo more attractive for creators. At its peak, Koo had about 2.1 million daily active users, nearly 10 million monthly active users, and over 9000 VIPs, including many prominent figures 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,” the co-founders reiterated.
Reflecting on their journey, they stated, “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 highlighted the need for patient, long-term capital to build ambitious, world-leading products from India, whether in social media, AI, space, EVs, or other futuristic sectors. Such ventures require significant investment, especially when competing with established global giants.
Koo’s Financial Struggles
Despite efforts to reduce its monthly cash burn to around Rs 10.2 crore in April 2023 from roughly Rs 16 crore in January 2023, Koo did not meet its target of Rs 6.5 crore by the end of March 2023, as reported by Moneycontrol.
The Tiger Global-backed company had raised $65 million from investors including Accel, 3one4 Capital, Naval Ravikant, Balaji Srinivasan, Kalaari Capital, and others.
