India is witnessing yet another heavily funded startup biting the dust as unsustainable business models and lack of foreign capital forces shutdowns. ‘Koo’, the Indian vernacular microblogging platform that presented itself as an alternative to ‘X’ (formerly Twitter), has officially shut down its operations. This decision was announced by the company’s co-founder and CEO, Aprameya Radhakrishna, via a LinkedIn post, signalling the end of an effort to provide a local alternative to global social media giants.
Koo’s closure comes after persistent struggles to gain traction and secure necessary follow-on investments. In September 2023, reports came in that Koo was actively seeking a merger or acquisition deal after failing to raise new funding. Despite extensive efforts to explore mergers and acquisitions with large internet companies, media houses, and conglomerates, none of these discussions resulted in a successful outcome.
According to Radhakrishna, the high cost of maintaining a social media platform was a significant factor in the decision to shut down. “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,” he stated in his LinkedIn post. “We explored partnerships with multiple larger internet companies, conglomerates and media houses but these talks didn’t yield the outcome we wanted,” the post added. “Most of them didn’t want to deal with user generated content and the wild nature of a social media company.”
Launched in 2020 when a rather chaotic Twitter was banning accounts left-right-centre, including several of India’s ministers, Koo aimed to capitalise on a demand for an Indian-owner and originated social media company. That demand slowly subsided, specially with Elon Musk’s Twitter acquisition. Koo’s rise was partly fueled by its positioning as a compliant alternative to Twitter during the latter’s conflict with the Indian government over content removal requests. This positioning attracted numerous high-profile Indian politicians to the platform. But this very positioning, which is generally short term, led to Koo’s decline.
At its peak, Koo boasted about 2.1 million daily active users and nearly 10 million monthly active users. The platform’s interface and features closely resembled Twitter, including a yellow bird logo and a yellow tick for verified users. Koo’s significant user base included prominent Indian politicians, celebrities, and public figures, making it a notable player in the social media space. Koo’s most recent funding round in November 2022 raised $6 million, co-led by Tiger Global and Accel Partners, with participation from Kalaari Capital, 3one4 Capital, and Dream Incubator (DI). Koo had raised over $50 million to date, with its largest funding round of $30 million occurring in May 2021. As of the last funding round, Radhakrishna held a 22% stake in the company, while Accel and Tiger Global held 15.8% and 11.8% stakes, respectively.
Despite its early success in attracting users, Koo faced significant challenges in securing long-term funding. While the platform managed to raise over $60 million from prominent investors like Tiger Global and Accel Partners, it struggled to translate its user base into sustainable revenue streams, as well as secure the necessary long-term capital to sustain its operations and compete with established global players like X, the erstwhile Twitter.
