India’s Koo shuts down after failed acquisition talks

New Dehli: Cash-strapped social media platform Koo, once hailed as a homegrown alternative to the global tech giant X (formerly Twitter), has ceased operations after months of unsuccessful negotiations with potential buyers.

The internet startup, recognizable by its yellow bird logo, reached out to media houses and internet companies for a possible acquisition, but these discussions did not yield the desired results, co-founder Mayank Bidawatka revealed in a LinkedIn post on Wednesday. Bidawatka mentioned that many potential buyers were reluctant to handle user-generated content and the unpredictable nature of a social media company.

“While we would have preferred to keep the app running, the high cost of maintaining a social media platform forced us to make this difficult decision,”  Bidawatka explained.

Peak Performance and Decline

At its zenith, Koo boasted 2.1 million daily active users and was on the brink of surpassing Twitter in India in 2022. However, a prolonged funding drought forced the company to scale back its growth ambitions, according to Bidawatka. Founded in 2020 by Aprameya Radhakrishnan and Bidawatka, Koo quickly gained traction as a local alternative for global engagement.

Support from prominent politicians, including Union Commerce Minister Piyush Goyal and former Communications Minister Ravi Shankar Prasad, led to a surge in users, peaking at 4.5 million in January 2021. By comparison, Twitter had around 24 million users in India in 2022, according to Statista.

Koo attracted significant investor interest, with Tiger Global and Accel investing over $60 million. The company was valued at $274 million in 2022, according to Tracxn. However, Koo struggled to monetize its platform, leading to severe financial difficulties amid challenging macroeconomic conditions. In April of the previous year, Koo laid off one-third of its 260-member workforce in an effort to conserve cash while seeking strategic partnerships.

For the fiscal year 2021-22, Koo reported a loss of ₹197 crore on an operating revenue of ₹14 lakh, according to regulatory filings. The company has not yet filed its financials for FY23.

“Indian digital products are being developed to international standards, and it's time to create global brands from India. As everyone knows, the global startup ecosystem has faced a funding crunch, which, if not for this, Koo would have been on its way to rapid international market expansion,” Bidawatka stated in a LinkedIn post in February.