Homegrown microblogging platform Koo, touted as India’s alternative to X (formerly Twitter), has been struggling to stay on course amid a funding crunch and is now actively seeking a partnership with a party possessing robust distribution capabilities as the "best way forward" for its growth.

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Koo’s co-founder Mayank Bidawatka said in a LinkedIn post that the company is currently in discussions with potential partners as they navigate the challenges of an "unfavourable market".

"The next phase for Koo is to build scale and that will happen with either funding or through a strategic partnership with someone who already has scale. With the current reality of a slow investor market, the best way forward is to partner with someone who has the distribution strength to give Koo a massive user impetus and help it grow," Bidawatka’s said.

"With a platform that's scale ready, Koo can outshine competitors with the right push on growth," the post, that sought to clarify multiple news reports on Koo’s future as well as pitch to investors, added.

Founded in 2020 by Aprameya Radhakrishna and Mayank Bidawatka, Koo has so far raised over $65 million from investors like Tiger Global, Accel, Blume Ventures. The micro blogging platform was last valued at over $270 million, as per data from Tracxn.

"Funding has come to a standstill and only near breakeven or early stage startups are lucky to raise funds, that too at low valuations/ heavy markdowns,” Bidawatka explained.

“While our stable state plan was to scale more before generating revenue, Koo too was caught in this unfortunately sour market timing and had to switch gears from a growth trajectory to a revenue generating engine. With just six months more on our trajectory, we would have beaten Twitter (now X) in India,” he said.

Koo’s revenues totalled to just Rs 14 lakh in FY22, up from Rs 8 lakh in FY21. During the same period, Koo’s losses jumped 460 percent to Rs 197 crore from Rs 35 crore in FY21, as per latest data available. The company is yet to file its FY23 financials.

Several reports have cited that the company has seen a big drop in users. The Tiger Global-backed startup saw its MAUs drop to about a mere 3.1 million in April 2023, the third straight month of decline this year. In January 2023, Koo’s MAUs were around 4.1 million, which fell closer to 3.5 million in February and dropped again to about 3.2 million in March, showed a Moneycontrol report.

The 3.1 million MAUs in April was just about a third from a peak of 9.4 million in July 2022, when X and the Central government were involved in a legal tussle but Koo has been unable to capitalise on the opportunity.

The company was burning around Rs 10.2 crore in April this year. While the cash burn had reduced from roughly Rs 16 crore in January, it was still far from the target of Rs 6.5 crore Koo had set for itself by March-end, according to Koo’s Management Information System (MIS), accessed by Moneycontrol.

Bidawatka explained in his post that Koo had to take a 180-degree turn, with an unfavourable market playing out. He reiterated the significance of a microblog tailored for native language speakers, asserting that it represents the most inclusive approach to expanding microblogging to a broader global audience.

"We still believe that a microblog built for the native language speakers is the most inclusive way to take microblogging to the larger world. 80 percent of the world speaks a native language, other than English, and they too deserve a language first platform to express themselves and connect better," he said.

Bidawatka emphasised that, given the current sluggish investor market, the most viable path forward is aligning with a partner or raising funds.

CNBC-TV18 has reached out to Koo’s founders for further comment.

This story will be updated when CNBC-TV18 hears from Koo’s management.