Twitter rival, Koo fires 30% of its staff after failing to raise funds

Twitter rival, Koo fires 30% of its staff after failing to raise funds

Koo, the Indian social media and microblogging platform that has become a Twitter rival, has apparently joined the layoff group, according to a Bloomberg report. The platform, which became popular in the Nigerian social media space following the Twitter ban in June 2021, has fired 30% of its global workforce.

The three-year-old microblogging service blames a funding shortage for the recent layoffs. Speaking on the issue, Koo’s CEO, Aprameya Radhakrishna, in a statement seen by Bloomberg, said,

We have had to take some tough decisions in the wake of the ongoing pandemic and its impact on our business. We are doing everything we can to support our employees during this difficult time and are committed to helping them find new opportunities.

The “global sentiment right now is more focused on efficiency than growth and businesses need to work toward proving unit economics,” a spokesperson for the company, backed by Tiger Global, said in a reply to queries by Bloomberg News.

This layoff trend comes after the microblogging platform was recognized as the second largest microblog available to the world. In November 2022, the platform clocked over 50 million downloads. This substantial momentum has seen an increasing trajectory in terms of growth because of its localization efforts.

With this sudden news for the employees, the microblogging platform, according to the report, hopes to support affected employees with compensation packages, extended health benefits, and aid in finding new jobs.

Read Also: Elon Musk’s Twitter no longer exists as X Corp takes over

Why the 30% layoff?

With the declining economic status, many tech companies have resorted to cutting down their workforce in a bid to save costs and manage their already precarious financial situation. Despite its success and global recognition, Koo still has a major loophole hindering its growth.

Koo has had trouble raising money in spite of its successes. Although Crunchbase reports that the company has received over $50 million in fundraising rounds since its inception, this amount appears insufficient to support its plans for continued expansion.

Koo has reportedly been looking for more funding to support its expansion aspirations, but it could be that investors have been reluctant to put money into the platform because they have doubts about its capacity to monetize its user base, which has grown tremendously in the last couple of months, particularly with all the Twitter power shift saga.

The microblogging platform had to find another way to manage its already limited resources, and cutting its employees would have been a good opportunity to accomplish it.

The firing of staff at Koo brings to light the difficulties startups have in obtaining funding. Many businesses still have trouble getting funding after their initial rounds, which might be because investors are frequently unwilling to fund businesses that haven’t yet established a clear route to profitability.

Koo can do better in the market

Twitter rival, Koo lays off 30% of its 260 employees due to funding shortage

Despite the setback, Koo still has a bright future ahead of it and may simply need to focus on its core competencies to overcome the obstacle and win widespread international acclaim.

Many Indians, including government officials, cricket players, and celebrities from the Hindi film industry, flocked to Koo as a local alternative during the legal disputes between the Indian government and Twitter over the content on the platform.

Localization and community building are two of these basic qualities, which are huge draws for users globally, as it has done with its Indian users. Additionally, with its user base on an upward development trend, it can investigate new monetization techniques to provide income and maintain its expansion.

With the right support and funding, Koo could emerge as a major competitor to established social media giants like Twitter and Facebook in the Indian market and globally. The app offers many more features than Twitter, including verification at no cost, multi-lingual content creation, and multi-image profile pictures.

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