Koo needs fresh funding or strategic partnership to continue its growth: Mayank Bidawatka
Koo, once a high-flying startup, had also roped in Naval Ravikant and Balaji Srinivasan as investors. It had even positioned itself to take on X (formerly Twitter) but now cannot scale without an M&A or fresh capital.
Homegrown microblogging website, Koo will need either fresh funding or have to be bought out by another player who has scale for its next phase of growth, Mayank Bidawatka, co-founder of Koo said in a social media post on September 15.
"The next phase for Koo is to build scale and that will happen with either funding or through a strategic partnership with someone who already has scale. With the current reality of a slow investor market, the best way forward is to partner with someone who has the distribution strength to give Koo a massive user impetus and help it grow," Bidawatka said on LinkedIn.
"With a platform that's scale ready, Koo can outshine competitors with the right push on growth," the post, that looked like a potential pitch to buyers and investors, added.
Once a buzzy startup, Bidawatka's comments underscore the stress at Koo. Moneycontrol had earlier reported that Koo's monthly active user (MAU) base has been on a constant decline.
The Tiger Global-backed startup saw its MAUs drop to about a mere 3.1 million in April 2023, the third straight month of decline this year. In January 2023, Koo’s MAUs were around 4.1 million, which fell closer to 3.5 million in February and dropped again to about 3.2 million in March.
The 3.1 million MAUs in April was just about a third from a peak of 9.4 million in July 2022, when Twitter (now X) and the Indian government were involved in a legal tussle but Koo has been unable to capitalise on the opportunity.
Koo's troubles do not end there. Along with a declining user base, Koo's cash burn remains high, too.
The Bengaluru-based company was burning around Rs 10.2 crore in April this year. While the cash burn had reduced from roughly Rs 16 crore in January, it was still far from the target of Rs 6.5 crore Koo had set for itself by March-end, according to Koo’s Management Information System (MIS).
MIS is a set of documents startups file with their investors periodically.
"Funding has come to a standstill and only near breakeven or early stage startups are lucky to raise funds, that too at low valuations/ heavy markdowns," Bidawatka's post said.
"While our stable state plan was to scale more before generating revenue, Koo too was caught in this unfortunately sour market timing and had to switch gears from a growth trajectory to a revenue generating engine. With just six months more on our trajectory, we would have beaten Twitter (now X) in India," it added.
While Koo is yet to file its FY23 financials, its revenues totalled to just Rs 14 lakh in FY22, as per the latest available data, up from Rs 8 lakh in FY21. During the same period, Koo’s losses jumped 460 percent to Rs 197 crore from Rs 35 crore in FY21.
Founded by Aprameya Radhakrishna and Bidawatka in 2020, Koo has raised over $65 million from large investors like Tiger Global, Accel, Blume Ventures and was last valued at over $270 million, as per data available on Tracxn, a market intelligence data provider.
