Koo, the Indian social media app once positioned as a competitor to micro-blogging giant X, is closing down, announced founder Aprameya Radhakrishna in a LinkedIn post on Wednesday.
The decision comes after multiple rounds of discussions for a potential sale or merger with various companies, including Dailyhunt, fell through, according to sources familiar with the matter.
Initially valued at $274 million following a successful funding round that raised over $66 million from investors, including 3one4 Capital, Koo has struggled to secure new investments since last year. Despite exploring merger opportunities with several platforms, the talks did not yield any positive outcomes. The company still retains some digital assets, such as cloud credits, which could be sold to interested buyers.
"They (Koo) faced significant pressure from the board and investors alike. The company laid off most of its staff and reduced expenditure, but unfortunately, nothing proved effective," said an informed source.
Koo's challenges underscore the difficulties local social media platforms encounter when attempting to compete with global counterparts.
ShareChat, another Indian social media app, has also experienced setbacks, including substantial operational downsizing and extensive restructuring involving large-scale layoffs. In 2022, its valuation plummeted by more than 60% from its peak of $5 billion to under $2 billion following a $50-million financing round via convertible notes.
"Koo boasted a like ratio of 10%, nearly 7-10 times higher than Twitter's ratio, making it a preferred platform for content creators. At its peak, Koo had approximately 2.1 million daily active users and 10 million monthly active users, including over 9,000 VIPs from various fields," stated a joint post by Koo's founders. "We were on the verge of surpassing Twitter in India in 2022 and could have capitalized on that momentum with adequate capital."
Despite its aspirations, Koo's journey highlights the uphill battle local platforms face in establishing themselves against dominant global players.
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