Koo's journey ends: Why India's X rival couldn't survive

Koo struggled to sustain operations and compete with established players in the absence of a viable revenue model

Representative image
Representative image

NH Business Bureau

Indian social media app Koo, once seen as a strong competitor to X (formerly Twitter), is shutting down. Founder Aprameya Radhakrishna announced the closure in a LinkedIn post, marking the end of the platform's ambitious efforts in the global social media landscape.

Koo's shutdown follows several failed attempts to sell or merge the platform, including negotiations with content aggregator DailyHunt, which did not materialise. Despite raising over $66 million from investors like 3one4 Capital and Accel, and being valued at $275 million, Koo struggled to secure the necessary funding to sustain operations and compete with established players. The inability to attract additional long-term capital ultimately led to the closure decision.

While Twitter’s blue bird soared higher, heralding the social media era across the world, Koo’s yellow chick, hoping to achieve a similar feat in the Indian subcontinent, succumbed to its dire circumstances prematurely.

The desi social media platform, which held a special place in the hearts of commoners and celebrities alike, was seen by many as an alternative to Twitter (before it was rebranded as X by Elon Musk) in India. Since Koo’s inception in 2020, one could not help but notice the striking similarities between the two platforms, from their logos to their aspirations. 

In 2021, during a period of governmental scrutiny of global critics of Prime Minister Narendra Modi and the BJP, Twitter found itself at odds with Indian authorities. On 1 February 2021, Indian authorities requested Twitter to suspend or remove dozens of accounts, citing threats to public order.

Twitter briefly complied but reinstated the accounts following a public outcry and refused to remove hundreds more. Amid this battle, Aprameya Radhakrishna’s 10-month-old social media platform was thrust into the spotlight.

Radhakrishna, a serial entrepreneur who sold his first company, TaxiForSure, to Ola for $200 million, launched Koo as a microblogging platform for local-language speakers in India, a country with more than 20 languages and over 700 dialects.

After weeks of battling with Twitter, some of India’s most prominent BJP politicians took to their social accounts and instructed their followers to abandon 'Western' social networks for Koo, a local, free-speech platform.

“I am now on Koo. Connect with me on this Indian micro-blogging platform for real-time, exciting, and exclusive updates,” became a common Tweet by many politicians in the Modi government.

Many followers obliged and overnight, the platform went from a relatively obscure app to headline news, and secured $4.1 million in series A funding.

News of its shutdown, therefore, raises significant questions about the sustainability and viability of social media start-ups in the country. Despite substantial investments from high-profile stakeholders over the years, financial hardships and failed acquisition talks with DailyHunt forced the founders to pull the plug on the enterprise.

After selling TaxiForSure to Ola Cabs in 2015, Radhakrishna partnered with Mayank Bidawatka to launch Vokal, a platform similar to Reddit and Quora for Indian languages.

Despite attracting many users, Vokal did not generate significant revenue, leading to heavy losses. Without a clear revenue path and with investors unwilling to tolerate losses, the Vokal team shifted its focus to creating a new social media platform, which led to the creation of Koo.

Even with backing from prominent investors such as Blume Ventures, 3one4 Capital, Tiger Global, Accel, and Kalaari Capital, Koo had difficulties developing a consistent revenue stream.

The platform reportedly generated a revenue of just Rs 14 lakh, and incurred a staggering Rs 197 crore loss in FY22. It was reported that 80 per cent of its employees were laid off since June 2022, with the remaining 60 employees operating with a 40 per cent salary cut since October 2023.

Posting on LinkedIn, Bidawatka stated that the company’s partnership talks with the content aggregator platform DailyHunt fell through, and that they would be discontinuing their service to the public.

“We explored partnerships with multiple conglomerates and media houses, but these talks didn’t yield the outcome we wanted,” he added. This subsequently led the company to halt the salaries of its employees.

The shutdown of Koo underscores the challenging landscape for new entrants in the social media industry, highlighting the critical importance of sustained funding and a viable revenue model for survival and growth.

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