Koo, the Indian social media platform once touted as a homegrown alternative to Twitter, is shutting down operations due to a lack of funding and failed acquisition talks, founders Aprameya Radhakrishna and Mayank Bidawatka announced in a LinkedIn post on Monday.
The Bengaluru-based startup, founded in 2020, aimed to provide a platform for Indians to communicate in their native languages in an English-dominated social media landscape. At its peak, Koo claimed to have 2.1 million daily active users, about 10 million monthly active users, and over 9,000 VIPs on the platform.
However, despite raising over $50 million from prominent investors like Tiger Global, Accel, 3one4 Capital, Kalaari Capital, and Blume Ventures, Koo struggled to expand its user base and generate revenue over the past year. The company explored partnerships with “multiple larger internet companies, conglomerates and media houses,” but the talks failed to yield the desired outcome.
“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,” the founders said in their statement. “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.”
The shutdown was triggered after Koo’s likely acquisition by online media firm Dailyhunt fell through. In April, the company also ceased salary payments to all its employees, citing financial constraints.
The company laid off nearly 30% of its 260-person workforce due to losses and difficulty raising funds in April of 2023. The company cites the current market environment and global slowdown as reasons for the layoffs.
Many Twitter alternatives have struggled to gain significant traction due to several factors. These platforms often lack user engagement and have limited functionality compared to the established platform.
They also face difficulty attracting investors and advertisers due to the dominance of big tech companies like Twitter. The network effect, where users prefer to stay on the platform with the most users rather than switch to a less popular alternative, also plays a significant role. Additionally, these platforms face challenges in attracting content creators, who are key to driving user engagement.
Despite the layoffs, Koo’s co-founder Mayank Bidawatka claimed that the company was well-capitalised and focused on becoming profitable through monetisation experiments. However, Koo and other Twitter rivals like Mastodon and Hive Social have significantly fewer monthly users compared to Twitter.
While there is demand for a decentralised platform with better moderation and privacy features, especially after Elon Musk’s controversial takeover of Twitter, most alternatives have failed to provide a compelling reason for users and advertisers to switch.
Koo gained popularity in 2021 when the Indian government was in a scuffle with Twitter over the non-removal of certain content, leading several ministers and government departments to flock to the platform. The app expanded its presence to Brazil, logging over 1 million downloads within 48 hours of launch, but struggled to gain significant traction in the Indian market.
The founders expressed gratitude to their team, investors, creators, and users in their farewell message, hinting at a potential comeback as entrepreneurs in the future. They also mentioned the possibility of making Koo’s assets into a “digital public good” to enable social conversations in native languages around the world.
The post Koo, India’s Twitter Rival, Succumbs to Funding Winter appeared first on Analytics India Magazine.