Koo discontinues salary from April amid talks with strategic partners
Microblogging start-up Koo has stopped alary payments to all its employees from April as the company is going through a cash crunch situation. The microblogging startup was touted as a direct competitor of X, formerly known as Twitter.
Some of the employees had raised concerns about salaries being halted from April, which the company confirmed. The company is in talks with strategic partners which is taking ‘longer than expected’ it said in its statement. In the past, the company’s founders paid the salaries out of their pocket, it added.
Koo said that salaries will be paid out after the conclusion of the partnership since this partnership also includes a fresh capital infusion.
“We are in talks with strategic partners for Koo. This is taking longer than expected. In order to get the partnership through we have ploughed in substantial personal funds also to meet past salaries. Salaries will continue to be paid after the conclusion of the partnership since this partnership also includes
The start-up saw its monthly active users drop to about 3.1 million in April 2023, which was the third straight month of decline this year
a fresh capital infusion into Koo. To be transparent with them, all of this has been communicated to all our employees well in advance since they have been the pillar around which Koo has been built. Our operations continue as is and don’t get affected by this delay,” said the company in its statement.
FUNDING DILEMMA
The company was looking to raise funds or tie up with a strategic partner to scale operations, amid the slow funding cycle cofounder Mayank Bidawatka had said in September 2023.
Although the app will remain operational, questions are being raised about Koo’s ability to maintain the tech platform and support users.
According to sources, Koo has around 60-70 employees left now after layos and voluntary exits. In April 2023, Koo had 260 employees. The count was even higher when it was faring well around the middle of 2022.
The start-up saw its monthly active users (MAUs) drop to about 3.1 million in April 2023, which was 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 X and the Indian government were involved in a legal tussle. During the same time, Koo managed to reduce its monthly cash burn to around ₹10.2 crore in April 2023, from roughly ₹16 crore in January 2023, according to news reports.
The company has raised approximately $65 million to date from investors such as Tiger Global, Accel, 3one4 Capital, Kalaari Capital and Blume Ventures. Koo struggled to establish a sustainable revenue model and failed to secure Series C commitments.