It’s been nearly 7 years since Sagoon, a social Network, came into existence. The platform opened its door with big promises and strong celebration. It aimed to create a better social media experience and meaningful communication.
In the last 5 years, it has openly boosted it’s position and raised millions with a promise to capture gift cards market(initial target was ads market). It began its journey as a vision to create a disturbance in the social media sector including the likes of Facebook, Twitters etc, but sadly the core statement seems lost.
In the financial records, it still pledges to produce a better social platform but its web front, Sagoon.com, is just an open invitation for investment and market accusation. Sagoon now seems more like an IPO hustler than an innovative social platform.
Back in 2013 Govinda Giri, (founder and CEO of Sagoon), left his job to pursue a dream of creating a “social commerce platform” which developed into Sagoon. It came to the public sphere in the year 2015 in Kathmandu with a big bold statement of “breathing new life to the internet”(press release).
The founders wanted to tap into Chinese and Indian markets while keeping a Nepali identity. The offering though was very simple. The platform offered a day planner (as the name suggests), moodTalk ( a chat platform with gifs to denote mood), and open-secret ( basically a way to share messages to a person or to group with a Snapchat-like time limit before deletion).
The promise though was to create a network built around a money incentive system. Your meaningful conversation will receive a certain share of revenues generated by the platform and it was called Smart Social Card. Sagoon already had raised half a million in seed funding (investment from angel investors) by then. The platform somehow had 1.5 million on the waiting list and 156,000 users.
The company was still in debt (as it was creating more users with features like sign in and earn $5 despite its waiting list of millions )and was still taking loans from private parties to sustain itself which is a norm for the ever-growing wild startup culture. Then Sagoon took advantage of JOBS Act (authority to float mini IPO to the public for limited funding with limited oversight) and began its process for mini IPO offering.
The SEC (US Security and Exchange Commission) filing since then gives an insight into Sagoon and its financials (SEC Filings Sagoon). As per the filings, we can confirm that Sagoon is the brainchild of Mr. Govinda Giri and he holds the ultimate power as the grand architect, director, and also the main voting power of the company. The company also lists Swati Dayal as cofounder, who leads the technical team out of India, as a Chief Operations Officer, but her power seems limited. Kabindra Sitoula leads the Marketing department. The present executive compensations of Sagoon for Govinda Giri, Swati Dayal, and Kabindra Sitoula are 60,000, 33,000, and 36,000 respectively.
The company listed to float its share at $23(which now has gone up to $30) per share with a minimum limit of 13 shares per buyer(which has now gone up to 30 shares). As per the context at the same time, Snapchat per share was floating at a similar price with almost 166 million daily active users.
Similar to Snapchat the class C stock that was being offered had very limited voting rights to conserve the voting powers of the founder. There was a huge hype in the market due to Sagoon’s active ads camping in the newspapers in Nepal, Indian, and some small online news blogs.
The company was successful in raising a generous amount from regular people. Be advised that many companies that have utilized this route of mini IPO’s have rarely succeeded in getting listed in any stock exchanges. Few of the stocks that have got listed in a trading exchange couldn’t even recover to their mini IPO’s listing price(Barrons).
Since then Sagoon has done a few mini IPO and raised substantial money from regular folks. With the money raised and mini IPO going, Sagoon has lavishly publicized itself through articles and Bollywood stars. The mini IPO that Sagoon keeps floating has been widely covered and it also has made some dubious investments. The SEC filing shows that the company still struggles financially and is on the verge of collapse as per it’s auditor ( which it needs to make public in order to sell it’s IPO).
While the IPO and it’s financials are widely covered the platform itself seems to lack any coverage.
The main product functionally hasn’t changed much since it’s birth. The look and the name have changed from Sagoon to Sagoon lite but the core functions are still the same. Sagoon lite’s main feature is still earning money rather than building meaningful communication.Cashing out the earned money in the form of gift cards is still hard. The entry barrier to start cashing out is really high( 25000 coins) which is almost impossible to reach through regular use. Most of the major brands’ gift cards seem to run out quickly. The platform itself looks a mix between instagram,facebook and snapchat.
As per Sagoon, it has more than 5 million and a growing user base (which has been flagged by SEC and seems dubious ) but the app download number seems to indicate otherwise. Sagoon lite android version has less than 200K downloads and apple numbers are very low. The main Sagoon.com has been a redirect to its investment page since 2016 which seems to show how Sagoon is currently dictating its priority. Sagoon also seems to be heavily cutting down its research and development budget which plummeted from 753,788 to 194,687 from the year 2018 to 2019 as per its annual report in SEC filing.
Sagoon at the present seems to be a dwindling startup that started with a huge ambition to create a product without a clear solution. It knows where to make the money and what the market wants like millions of startups but fails to produce a concrete product. The company now merely seems to be interested in raising money from mini IPO’s rather than building a better product.
We all fail and it’s worth taking a risk to build something but Sagoon is offloading its risky behaviors to thousands of common people who fully cannot comprehend the risk. The platform at this point doesn’t leave up to its dream. Sagoon is a failing startup that needs to seriously reevaluate its platform, on the other side it’s investors should be wary of their investment, especially at such a steep price tag.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Global News break or any other agencies.
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