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Indian social media app Koo shuts down after funding talks fail
Image Credit: Koo/Koo Global

Indian social media app Koo shuts down after funding talks fail

| @indiablooms | 03 Jul 2024, 04:55 pm

Bengaluru: Indian social media app Koo, once considered a potential future rival to the micro-blogging platform X, has shut down today, is closing down, founder Aprameya Radhakrishna announced on LinkedIn on Wednesday.

This decision came after several failed discussions for a potential sale or merger with various companies, including Dailyhunt, according to sources familiar with the matter. Koo is supported by investors Accel and Tiger Global.

“And when one of these companies takes off, it can't be left to the whims of the capital market, which goes up and down. It needs a strategic outlook to safeguard it and make it thrive,” Radhakrishna said in the post. “These aren't to be looked at as profit churning machines in two years from launch. They need to be nurtured for a larger long-term play. We would love to see that long-term view for large bets from India.”

Koo was last valued at $274 million after it raised more than $66 million from investors, including 3one4 Capital.

Before founding Koo, Radhakrishna established the ride-hailing company TaxiForSure, which was acquired by Ola in 2015.

Bidawatka was a colleague of Radhakrishna at TaxiForSure.

Koo had been struggling to raise new capital since last year, prompting it to explore mergers with various platforms, but none of the discussions materialized.

Sources mentioned that the company still possesses some digital assets, such as cloud credits, which may be sold to potential buyers.

“They (Koo) were under a lot of pressure from the board and investors too. The company fired the majority of staff and even cut down on burn, but eventually nothing worked out,” a person aware of the matter said.

Radhakrishna said, “We explored partnerships with multiple larger internet companies, conglomerates and media houses, but these talks didn’t yield the outcome we wanted. Most of them didn’t want to deal with user-generated content and the wild nature of a social media company.”

The LinkedIn post from the Koo founders said the prolonged funding winter “got the better of us”.

“We needed five to six years of aggressive, long-term and patient capital to make this dream a reality,” they said.

Koo’s struggle brings to attention the difficulties local social media platforms face for survival while competing against global rivals.

“Koo used to have a 10% like ratio, almost 7-10x the ratio Twitter had, making Koo a more favourable platform for creators. At our peak, we were at about 2.1 million daily active users and 10 million monthly active users, over 9,000 VIPs that included some of the most eminent personalities from various fields,” the joint post from Koo founders said.

“We were just months away from beating Twitter in India in 2022 and could have doubled down on that short-term goal with capital behind us.”

Koo had expanded operations to Brazil last year.

“The little yellow bird says its final goodbye,” the post said.

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