‘… Just Months Away from Beating Twitter’: Koo to Shut Down Operations
'... Just Months Away from Beating Twitter': Koo to Shut Down Operations
Despite rapid growth and high engagement, Koo’s struggle with funding and operational costs forces it to cease operations.
The Indian social media platform Koo, which had emerged as a significant competitor to Twitter (now X), announced the discontinuation of its services. The decision comes after last-resort acquisition talks with Dailyhunt collapsed. A prolonged funding winter has severely impacted the company.
Koo’s co-founders, Aprameya Radhakrishna and Mayank Bidawatka, reflected on the journey of the platform and the factors leading to its closure. At its peak, Koo boasted a 10% like ratio, which was 7-10 times higher than Twitter’s, positioning it as a more engaging platform for creators. The platform had around 2.1 million daily active users. From 10 million monthly active users, there were 9000+ VIPs from various fields.
“We were just months away from beating Twitter in India in 2022,” the co-founders stated. They believed that with the necessary capital, they could have achieved this short-term goal. However, the challenges of maintaining and growing a social media platform proved daunting.
“Social media is one of the toughest companies to build, even with all resources available,” the co-founders explained. They emphasized that building a platform to a significant scale before generating revenue requires substantial, long-term investment.
Koo’s financial struggles became apparent as it attempted to reduce its monthly cash burn. In April 2023, the company’s cash burn was around Rs 10.2 crore, down from Rs 16 crore in January 2023, but still far from its target of Rs 6.5 crore by March-end of that year. Despite securing over $60 million in funding from prominent investors including Tiger Global and Accel, Koo faced significant challenges in expanding its user base and generating revenue.
The high cost of technology services required to keep a social media app running was an important factor in the decision to shut down. “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,” the co-founders stated.
Koo explored partnerships with larger internet companies, conglomerates, and media houses. However, these talks did not yield the desired outcomes. Many potential partners were reluctant to deal with user-generated content and the complexities of managing a social media platform. Additionally, the funding winter that hit most tech companies post-pandemic also affected Koo, leading to layoffs and a scaling back of growth plans.
The co-founders highlighted the importance of patient, long-term capital in building ambitious, world-beating products from India. They acknowledged the need for significant capital investment in industries like social media, AI, space, and EVs, where competition with global giants is fierce.
Koo’s journey from its inception in 2015 to its peak as a rival to Twitter was marked by highs and lows. Despite the platform’s innovative features and high engagement rates, the challenges of scaling and sustaining a social media platform ultimately led to its closure.
