SUMMARY
Multiple Koo employees had raised concerns about salaries being halted from April, and the company confirmed the development in an emailed response to Inc42
As per sources in the company, employees were informed about the changes on a Zoom call with no subsequent emails or communication
A Koo spokesperson said that the company is in talks with strategic partners and this is taking longer than expected
koo
, the Indian microblogging app once seen as a rival to X (Twitter), has stopped paying salaries to all its employees from April 2024 onwards citing financial constraints.
Multiple Koo employees had raised concerns about salaries being halted from April, and the company confirmed the development in an emailed response to Inc42.
A Koo spokesperson said, “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 the conclusion of the partnership since this partnership also includes a fresh capital infusion into Koo.”
As per sources in the company, employees were informed about the changes on a Zoom call earlier in April 2024. One employee told Inc42 there was no prior communication about the pause in salaries and no response from their managers or the HR team for questions raised after the announcement.
Another employee claimed that no formal emails were sent to employees to explain the disruption in pay. Incidentally, Koo is stopping short of laying off employees, despite a severe reduction in headcount since 2022.
Layoffs typically involve severance pay and in Koo’s case, the company would have had to compensate employees being let go with an amount equivalent to salary of one or two months, one employee told us.
“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,” the spokesperson added.
Koo’s statement added that in the interest of transparency, the news was communicated to all employees well in advance. “They’ve been extremely patient and supportive throughout our journey and they need to know. There’s nothing we wouldn’t do to help them. The most important thing for the company’s long term success is the partnership and we want to see that through. Our employees understand that. Our operations continue as is and don’t get affected by this delay,” the spokesperson added.
Last week, Inc42 reported that the company had reduced its workforce by over 80% since June 2022, resulting in a headcount of just 60. This has now dropped further to around 50. Additionally, those employees that have been retained have seen their salaries slashed by up to 40% since October 2023.
A slew of senior employees left earlier this year, after a significant cut in their pay. “For employees having salaries higher than INR 30K, there was a salary cut of up to 40%. This was significant for many,” said one of the employees.
Although the app will remain operational, questions are being raised about Koo’s ability to maintain the tech platform and support users.
Despite backing from notable investors like Tiger Global, Accel, 3one4 Capital, Kalaari Capital, and Blume Ventures, Koo struggled to establish a sustainable revenue model and failed to secure Series C commitments.The company has raised approximately $50 Mn to date.
With an operating income of only INR 14 Lakh and a staggering INR 197 Cr loss in FY22, the company struggled to establish a viable revenue model and heavily relied on burning cash to acquire new users. The startup has thus far not filed its audited FY23 financials.
Koo halted all customer acquisition campaigns from June 2022, leading to a decline in active users. The number of active users plummeted from 7.2 Mn in June 2023 to a mere 2.7 Mn, marking a 62% drop in the past nine months, according to data sourced from Data.ai.
Over the past year, the company has been seeking a strategic partner and exploring acquisition options. Despite months-long discussions, including potential acquihire deals, the situation seems to have taken a negative turn. According to unconfirmed reports, Dailyhunt is said to be in talks to acquire Koo.
