KOO HALTS SALARIES FROM APRIL AS IT FAILS TO FIND STRATEGIC PARTNER, CEO SAYS WILL STAY OPERATIONAL

Koo, the microblogging startup once hailed as India's answer to Twitter, is facing financial challenges leading to a halt in salary payments to its employees starting in April. This decision stems from a delay in the company's search for a partner or acquirer that could help sustain its operations.

The startup had been actively seeking funds or a strategic partnership to expand its operations, especially amidst a tough funding environment for startups. However, negotiations have prolonged amid what is described as a "funding winter."

Co-founder Mayank Bidawatka reassured the public in a LinkedIn post that Koo remains operational, emphasizing its robust and automated product that requires minimal manual intervention. He also mentioned that the founders have personally contributed funds to ensure salary payments for March.

“Koo remains operational. It’s a very well-built and fully automated product that needs little manual intervention to function. There’s a proud team that stands behind it, irrespective of where they are today,” he said.

Koo's financial struggles were highlighted in a report from The Arc in September 2023, which stated that the company's valuation stood at Rs 2,230 crore in its last funding round in June 2022, with a dwindling cash balance of about Rs 20 crore.

Earlier this year, Koo was in discussions for a potential acquisition by VerSe Innovation, the parent company of Dailyhunt and Josh. However, no conclusive partnership has been reached yet.

Bidawatka acknowledged the challenges faced by the company, including salary cuts and workforce reductions, but remains optimistic about the future, reiterating the importance of finding a suitable partner to propel Koo's growth.

Future salary payments for employees are contingent upon the conclusion of a partnership or acquisition deal, according to Bidawatka. The company, backed by investors such as Tiger Global Management and Accel India, has raised over $65 million to date.

Despite initial comparisons to Twitter and gaining attention during the farmers' protest in 2021, Koo has encountered setbacks amidst a broader funding downturn, struggling to maintain its workforce and operations. However, with ongoing efforts to secure a partnership, Koo remains hopeful for its future prospects.

(With inputs from agencies)

2024-04-26T05:56:23Z dg43tfdfdgfd