Failed takeover talks lead to closure of Indian startup Koo

Indian social media startup Koo, once considered a formidable homegrown alternative to Twitter (now X), has unexpectedly announced its closure. The decision to end the microblogging journey came after acquisition talks with various potential partners collapsed. Co-founders Aprameya Radhakrishna and Mayank Bidawatka made the announcement in a LinkedIn post on July 3.

Koo’s story is one of ambition and rapid growth. It was launched primarily to cater to Indian users and successfully positioned itself as a direct competitor to X. It peaked during X’s legal disputes with the government. Its appeal was its local nature and commitment to regional languages. It even attracted a broad user base. As of July 2022, it boasted 9.4 million monthly users.

Koo was initially backed by major investors such as Tiger Global, Accel, and Kalaari Capital. However, its fortunes began to change, and the first sign came in September 2022, when the company laid off 40 employees. The situation worsened further in April 2023 with another round of layoffs. Around 30% of the workforce was affected. At the same time, the active user base on the platform dropped to 3.1 million.

The co-founders revealed that they had been in talks with several larger internet companies, conglomerates and media houses, both about acquisition and partnership. However, the talks yielded nothing positive. Many potential partners were concerned about the challenges of managing user-generated content, as well as the changing nature of social media in recent times. In addition, some media partners changed their priorities at the last minute, which further complicated the negotiations.

Running a social media platform is an expensive endeavor. It also requires significant investment in technology and infrastructure.