Social media startup, Koo, which had positioned itself as the homegrown alternative to X (formerly Twitter) will only be able to pay employee salaries after it finds a larger company that will acquire it, co-founder Mayank Bidawatka said on LinkedIn in a post that suggested the company has been cash-strapped for at least a few months.
Bidawatka’s comments come after Koo failed to pay employees their salary this month. While this was the first full month of salary default, the going has been tough for the startup. “We have gone to the extent of the founders putting in a substantial amount from their personal funds so that salaries for March can be met,” he said in his post.
And now “...future salaries can only be paid out once the partnership is concluded. This transparency helps them resort to options that work best for them,” he added. By partnership, he meant a strategic buyer who will fully acquire Koo’s business. Koo has been looking for a strategic buyer for a while now but has not garnered interest from anyone so far.
“The delay in the partnership hurts everyone without an exception but it’s a process that’s taken its own time. The talks are still on. We know that this partnership will be good for the brand and for the partner,” his post added.
In the interim, the company has allowed staffers to work other jobs part time or on a full-fledged basis. Such an arrangement is rare in the white collar world. "We have encouraged people to consult or work full / part time with others to meet their cash needs. They’ve all been extremely supportive and want to see the company do well. It’s the mark of a great team," Bidawatka said.
Sources told Moneycontrol that Koo has only 50-60 employees left now after layoffs and voluntary exits. As of April 2023, Koo had 260 employees. The count was even higher when it was faring well around the mid of 2022.
The startup saw its monthly active user (MAUs) drop to about 3.1 million in April 2023, which was the third straight month of decline in that year. In January 2023, Koo’s MAUs were around 4.1 million, which fell closer to 3.5 million in February 2023 and dropped again to about 3.2 million in March 2023.
The 3.1 million MAUs in April 2023 was just about a third from a peak of 9.4 million in July 2022, when X (formerly Twitter) and the Indian government were involved in a legal tussle. During the same time, Koo managed to reduce its monthly cash burn to around Rs 10.2 crore in April 2023, from roughly Rs 16 crore in January 2023, Moneycontrol had reported earlier.
The Tiger Global-backed company has raised $65 million so far from Accel, 3one4 Capital, Naval Ravikant, Balaji Srinivasan, Kalaari Capital and several others.
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