Koo focusses on improving user experience

Koo has a good thing going. It has seen a big spike in users since the beginning of the year, Indian ministers and celebrities have logged in to the microblogging platform, and for many it is fast emerging as an Indian alternative to social media giant Twitter.

Investors seem to be loving it as well. Earlier this week, the Indian microblogging platform raised $30 million in Series B funding. The funding round was led by New York-based private equity firm Tiger Global, while existing investors such as Accel Partners, Kalaari Capital, Blume Ventures, and Dream Incubator also participated. Koo also onboarded two new investors—Mumbai-headquartered IIFL’s venture capital fund and South Korea’s Mirae Asset Management. With the conclusion of this round, Koo is reportedly valued at over $100 million.

"We have aggressive plans to grow into one of the world’s largest social media platforms in the next few years. Every Indian is cheering for us to get there soon. Tiger Global is the right partner to have on board to realize this dream,“ said Aprameya Radhakrishna, co-founder and CEO, Koo, in a statement.

Tiger Global already has a foothold in the Indian vernacular social media space with its investment in ShareChat. The Koo App, which also supports Indian languages and has been downloaded more than 5 million times on the Google Play Store, had raised $4.1 million in its Series A round in February.

Mayank Bidawatka, Koo’s co-founder, points out that the Series B funding was particularly important because it came at a crucial time for the organisation. “We were already on an expansion spree and were in the process of implementing some new structural features to the app when the funding round occurred,” Bidawatka tells Fortune India. He says the fresh funds will be utilised to develop and enhance these structural features which would, in turn, enhance the user experience of the app.

Koo launched in March last year, but came into the limelight earlier this year because of a tussle between Twitter and the Indian government. The latest funding round comes at a time when the Jack Dorsey-led social media giant is at loggerheads with the Indian government over the latest IT regulations and other issues. The deadline to comply with the new IT rules was May 26.

Koo is compliant with the new rules. In an earlier interaction with Fortune India, Radhakrishna had indicated that the company would indeed comply with whatever regulations the government has put in place. Last week, the company announced that it has met the requirements of the new IT rules.

Pavel Naiya, senior analyst with market research firm Counterpoint, argues that these new IT rules have, in effect, divided India’s Internet ecosystem. “I am not saying whether it is good or bad. But this division of the Internet between the big technology companies, a majority of whom are American, and localised home-grown tech companies, of which Koo is a fine example, is something you see in other countries too. China, for example, has WeChat, which is wildly popular there. Similarly, you have such examples of home-grown social media startups in South Korea as well,” he says. Naiya says that while there may be strong arguments against these new IT rules, these are now laws of the land. “It is unlikely these laws will be rescinded now. So we need to see the ecosystem as it will evolve henceforth.”

Naiya is of the view that while it is unlikely that Big Tech companies will simply leave a hot market like India, it does open up interesting avenues for competition. “Those avenues will largely depend upon features and stickiness. How sticky an app is for the user, how smooth is the user experience, those are important parameters to consider,” he points out. But he is ambivalent about Koo’s market position and wants to wait and watch.

However, Koo’s recent strategies are an indication that the company is taking its app features seriously and wants to offer something different. Earlier this month, for example, Koo announced the launch of its new ‘Talk to Type’ feature. This feature—an extension of something already available on Vokal, a vernacular-focussed question-and-answer app on the lines of Quora, also developed by Koo’s two co-founders—enables the user to share their thoughts using voice command, which then converts the voice into text form. In an earlier interview, Bidawatka had argued that a majority of Indian searches on Google happen via voice, especially so if the searches are happening in vernacular languages. So it made sense to offer this function to their app. Because the USP of Koo lies in offering a multitude of language options, something not yet found on Twitter, this new feature ties in with that problem statement—which is to make conversations for the user easier. Bidawatka also points out that a chunk of the money raised in Series B will go into improving user discoverability on the Koo app, a feature, he says, will improve the network effects for a user, allowing for more stickiness.

Whatever be the outcome of the new IT regulations now in place, it is safe to say that the ecosystem has changed, and the space has become very interesting for the players.