Homegrown microblogging platform Koo has scaled up fast with a download of 60 million in the last three years. But the startup seems to be losing momentum on monthly active users. In its communication to investors, Koo has said its monthly active users reduced to 4.1 million in January from 9.4 million in July 2022. Monthly active users are the ones who log on to the app, at least once a month.
The platform, which was started by Aprameya Radhakrishna and Mayank Bidawatka, and has investment by Tiger Global, had seen a sharp increase in monthly active users when the government was locked in a tiff with Twitter over intermediary guidelines,
According to analysts, the decline in the active user base could be due to the platform lacking the vibrancy of Twitter. This is despite some of its inherent advantages, like offering the services in nine regional languages. In fact, the founders in the past have said that its target audience is quite different from Twitter as it is targeted at the non-English speaking population.
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“As a privately held company, we do not encourage speculation of any of the business numbers, past, present or future, unless stated out explicitly by the company. Koo is a young company and in just three years of launch, Koo has over 60 million app downloads and is the second largest microblog available to the world with over 20 global languages on the platform,” a Koo spokesperson said in response to FE’s queries.
The platform does boast of a host of Central ministers and government departments as its members, but the Opposition parties are by and large conspicuous by their absence. Even prominent India Inc personalities are not present on the platform.
“Such platforms attract a large number of users and are able to retain them only when the engagement levels are very high. We have seen in the past that homegrown platforms similar to messaging app, WhasApp faded away because they were not able to become a generic product,” said an analyst.
Of late, Koo has been spending less on marketing activities, which could also be one of the reasons for failing to get new users.
In FY22, Koo’s revenues were at Rs 14 lakh, up from Rs 8 lakh a year ago. However, its losses jumped 460% to Rs 197 crore in FY22 from Rs 35 crore in FY21. This probably explains the need for cutting back on expenses like marketing activity.
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Industry sources said that the platform is losing about Rs 9-10 crore a month. Considering its current monthly cash burn rate, Koo has a cash runway till around July-August, they added. The company has told its investors like Accel, Blume Ventures, Kalaari Capital, 3one4 Capital and others, that it would bring down its cash burn rate to Rs 6.5 crore by the end of the month.
To attract new users and to retain the existing ones, Koo has rolled out a loyalty programme, which rewards users with ‘Koo coins’. Koo users will be able to earn more such coins the longer they stayed on the platform, and these coins can be redeemed for special offers from brands across the country.
“We help users earn coins through our Koo coins loyalty programme for app engagement and referring other users. These coins can then be exchanged for special offers from businesses that gain from new users and usage. This ensures that everyone wins,” Koo’s CEO Radhakrishna had said in a statement while launching Koo coins in February.
“The spend on acquiring new customers is zero and the company is more focused on monetising the loyal base of users than acquiring new paid acquisition for growth…we expect our burn to keep coming down as planned. Salaries and our tech infrastructure are our only costs now,” the company spokesperson said.
“We had initially experimented with a cash for coins program which gave us a spike but (that) was not sustainable in the long run and we continue to reward our loyal users through their favourite brands,” they added.
Launched in 2020, Koo has so far raised over $70 million from its investors, including over $17 million that the company raised in 2022. With over 60 million downloads, it claims to be the second-largest microblogging platform in the world, with presence in over 100 countries and offering more than 20 global languages.