Homegrown microblogging platform Koo has stopped paying salaries to its entire workforce from April 2024, citing financial constraints.
The company attributed the decision to a delay in ongoing negotiations with potential strategic partners. “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 post conclusion of the partnership since this partnership also includes a fresh capital infusion,” a Koo spokesperson stated.
Dismissing layoff rumours, the spokesperson added, “There have been no new layoffs. Koo was and will remain operational. We are still in talks with strategic partners and will announce details at the right time.”
However, company sources paint a grim picture, revealing that Koo has already witnessed an exodus of senior-level employees in recent months, following the implementation of a 40% salary cut for those earning above the Rs 30,000 per month threshold.
Koo was reportedly in talks to be acquired by news aggregator platform Dailyhunt and short-video app Josh’s parent company VerSe Innovation. However, sources confirmed to FE that the talks have fallen through.
VerSe announced last week that it acquired global newsstand platform Magzter.
Koo co-founder Mayank Bidawatka on Thursday took to Linkedin to provide an update that “talks are still ongoing but are delayed”.
“It’s painful to cut salaries of people who’ve helped build the company. We had the option of either letting a good part of the workforce go or do a haircut for everyone. We did the latter. This way everyone could sustain without having to look for a job at a time when hiring across startups is at its all time low,” Bidawatka added in the post.
“Koo remains operational. It’s very well built and a fully automated product that needs little manual intervention to function,” he added.
The platform, backed by Tiger Global, Accel, 3one4 Capital, Kalaari Capital, and Blume Ventures, has raised $50 million in funding so far. In FY22, the company posted a loss of Rs 197 crore on a mere revenue of Rs 14 lakh, according to its financial statements, sourced from TheKredible.
Once touted as the rival to X, Koo has since June 2022 halted all customer acquisition campaigns. Its active user counts has plummeted from 7.2 million in June 2023 to 2.7 million as of March 2024, a 62% drop in the past nine months, according to data sourced from Data.ai.
