Bangalore-based microblogging app and Twitter rival in India, Koo has laid off nearly a third of its workforce in recent months due to losses and an inability to raise funds. According to a company spokesperson, the Tiger Global-backed company dismissed 30% of its 260 employees as the “global sentiment right now is more focused on efficiency than growth and business needs to work toward proving unit economics”. 

However, co-founder Mayank Bidawatka claims that Koo, which has more than 60 million downloads, is “well capitalised” and is attempting to become profitable through monetisation experiments. The company has one of the highest revenue per user among social media firms. The platform raised $273 million in funding last year, according to research firm Tracxn, and is supporting dismissed employees through compensation packages, extended health benefits, and job aid.

A spokesperson told AIM that Koo is not looking to raise funds at the moment. “We are well capitalised with our recent fundraise of $10 million in Jan 2023. We aren’t looking at raising funds right now. We are making great progress with revenue and will look to raise funds in the future as necessary,” he said.

The spokesperson described the layoff situation as acting ‘on some role redundancies by letting go of 30% of the workforce’. “Given the current market environment and external realities of a global slowdown, we get affected too. It’s important for businesses of all sizes to adopt efficient and conservative approaches to see this period through. In line with this, we have acted on some role redundancies by letting go of 30% of our workforce over the course of the year”.

Koo initially benefited from Twitter’s dispute with the Indian authorities over content on its platform, as many government officials, cricket stars, and Bollywood celebrities turned to Koo as a local alternative. However, the company is now struggling to access funds amidst a depressed investment environment that has seen the valuations of many startups decline. 

Despite the situation, people at Koo remain optimistic. The spokesperson said, “With over 100+ brands advertising on the platform, we will continue to experiment with monetisation to build a sustainable business.”

“As history has proven, there will be better times for all of us collectively and we are most positive about what we are building for the world and what Koo means for India’s foray into the world of social media,” he added.

Twitter Alternatives Doomed to Fail?

Twitter got embroiled in multiple controversies after the takeover by Elon Musk, inadvertently creating a demand for a decentralised platform that offers better moderation and privacy features. Many Twitter-like platforms quickly mushroomed in the days that followed but none came close to the giant that Twitter still was. Even though ad spending on Twitter is down nearly 20%, it still remains the go-to microblogging platform for the majority of users.

The new launches failed to gain traction largely due to the network effect, where users prefer to stay on the more established platform with more users than switch over to another alternative. Other reasons cited for their failure include, lack of user engagement, limited functionality, and difficulty in attracting investors due to the dominance of big tech companies. Many of these platforms also struggle to attract content creators who are the key to user engagement, leading to a lack of unique and compelling content. 

HubSpot reports that Mastodon and Hive Social, which are Twitter’s direct rivals, have less than three million monthly users. This is significantly lower compared to Twitter’s massive user base of 450 million per month, indicating that these alternative platforms have a lot of ground to cover before they can become viable options.

Additionally, platforms that aim to provide a censorship-free environment may struggle to attract mainstream advertisers due to concerns over brand safety. Alternative platforms will likely continue to struggle unless they can find a way to address these issues and provide a compelling reason for users and advertisers to switch over from the established platforms.

Meanwhile, Twitter’s former CEO and co-founder Jack Dorsey, has launched an Android app following the release of Bluesky’s iOS app in February. However, interested users will need to join the waitlist or obtain an invite code from a friend to access the service. But many believe Bluesky’s community of over 25,000 people are dedicated to maintaining a positive environment as Twitter keeps slipping.