Sagoon Inc, a US-based company that runs www.sagoon.com, which, the company claims, enables users to make a ‘true connection’ with others. The company also claims that it will eventually be able to provide its user base the ability to monetize time spent on the website through a revenue-sharing model. The company is currently on the closing phase of funding as part of its mini-IPO to collect a total of $20 million from the public.
While Nepali citizens are not legally allowed to make investment in the shares of the company from inside the country, Sagoon is trying to tap into the non-resident Nepali community for the fund.The funding will close on July 26, according to Sagoon. Republica talked with Sagoon Inc’s Founder and CEO Govinda Giri about the platform, its mini-IPO, returns for investors, among others. Excerpts:
Please tell us about the progress in the growth of Sagoon users in recent years.
Currently we have 2.5 million users in our platform. Out of the total users, 1.7 million are from India while the rest of the users are from Nepal, the US and other countries around the globe. Our major reach is in South Asia as this is the region where our major focus lies. We have not focused on any particular country from the marketing perspective. Majority of our users are from three countries: Nepal, the US and India.
Why is your company focusing on South Asia?
The influence of other global social media in South Asia is very low compared to other regions. Sagoon wants to go to this region that has largely been untapped by other global companies. Another reason is the cultural proximity. With our belief that our understanding of culture fits South Asia, we have tried to cover this region. There is a growth potential in South Asia. Also, countries like India are forward in e-commerce. As our business model is to socialize e-commerce, and as users in these countries are already experienced in it, we have decided to focus in South Asia.
In what ways Sagoon is different from other social media platforms?
In India and China, there is a trend of copying from the US companies, particularly social networking platforms. WeChat is more or less a copy of Facebook, while Flipkart in India is like Amazon. In terms of Sagoon, our product is not exactly a copy of any. But, there would be similarities when it comes to features like social networking and photo sharing, among others. But if you dig deeper, the purpose of our features is completely different from existing social networking sites.
How has been the response for the mini-IPO of Sagoon so far?
We are now in the third or closing round of the funding. The Securities Exchange Commission of the US had given us the approval in July 26 last year which is going to expire on the midnight of July 26 this year. After that, the funding will be closed and we will not be able to raise the fund from the public. We spent the fund collected in the first round for research and product branding. The second round of the funding was opened for a shorter period. This is the last round of funding. We have gone to the public and created a buzz in the media as we do not have sought the funding from venture capitals. This is our last call for investment, and I urge people not to miss this opportunity. The idea of the mini-IPO is to give the first investment opportunity to our users rather than millionaires and venture capitals.
How and by when those making investment in your company will start getting return or dividend?
Those investors can sell their shares anytime they want. Upon the request of a shareholder, the ownership gets immediately transferred to the new buyer. Similarly, if any big company acquires or buys Sagoon, we can get reasonable price for our shares. Based on our business model, Facebook or Microsoft may acquire us because these companies are weak in social networking in South Asia and they want to increase their global influence.
From e-commerce point of view, we look closer to Alibaba and Amazon. These are some of the companies, and we aim to disrupt their market through our growth. In such scenario, they may want to buy us. If we agree to sell our shares, the company acquiring us will buy our shares. If we do not want to go for acquisition, we plan to go for full IPO by 2023. By that time, our target is to increase the valuation of the company to minimum $5 billion to $10 billion. Following the IPO, those investors making equity investments can sell their shares and get returns.
This means investors have to wait long to get returns?
Those investing in startups have to normally wait for 10 to 12 years for returns. If you look at Facebook Inc that started in 2004, investors had to wait for 12 years before they started getting returns. The value of shares of Uber investors is increasing virtually, and the company has not gone for IPO yet. They have not received any returns yet. Investments in startups are of long-term nature.