Every year there are thousands of apps released in the app store. They are one of the building blocks of the technology we use today.
Everything has an app, and our mobile phones would be almost useless without it. Mail, Social Media, Education, and Lifestyle applications are easily found and widely used.
Today, we are exploring one such social media app, Sagoon. I believe many of us are aware of this or at least seen advertisements of it on social media.
What is Sagoon App?
Sagoon is a USA-based, Nepalese app. It has gained much fame and has been incorporated in countries like Nepal, India, and the USA. The Bollywood star, Shraddha Kapoor was part of its launch in India. Sagoon is a free app available only on Android that allows people to connect, share and earn.
The feature that makes it stand out the most is its smart coins. Users can activate a smart account which enables them to collect and send coins. These coins can later be used to earn gifts from the company’s partners. Gifts include QFX Movie tickets, Recharge cards, Foodmandu vouchers, bhatbhateni, big bazaar, and more.
The web app was released in January 2017 and the android version was released in 2018. And since then it has gained 5,429,597 users! These users are spread across 145 countries they have also reached 4000 investors globally.
Another reason why the app is different because of the mini IPO it released.
The application had released a mini IPO for the price of $30 per share and the small investment being 30 shares. This was most probably done because the company had low funds, as discussed in our previous article about why companies release IPOs.
Also Read: Why does a company release IPO?
The story of Sagoon.
On the Internet, there are many things against the app too. In fact, somebody even called it “Thagoon” calling it a fraud.
As per the company’s 2019 financial report, its accumulated loss by the end of the year was $93 lakh, or Nrs 1 billion. Since the company has not made any income, the loss has become a burden for investors. Most of the investors of the company are Nepalis who live in foreign countries temporarily or Nepali-origin Nepalis who have taken permanent citizenship in various countries.
As per the report submitted by Sagoon to the U.S. Security and Exchange Commission, the company has $11 million in its coffers for regular company operations since December 2019.
With this amount, it is questionable how the company, which has offices in three countries, can keep up the expenses like paying for the staff and administrative expenses.
Another reason it is considered risky is because of its scam marketing in trying to attract investors. As reported by the Centre for Investigative Journalism, Nepal.
On July 16. In 2018, Sagoon signed a contract to provide a share worth $100,000 to NRNA-Britain. Sagoon raised hundreds of thousands of dollars from Nepalis in Britain through the social credit it earned by supporting the social organization. But as of now, NRNA-Britain has neither received the share nor the money as promised.
“NRNA-Britain is not allowed by British law to take shares of any private company,” said a former president of NRNA-Britain. “It was just a gimmick by Giri to influence the then leadership and sell shares.”
Surya Gurung, the current global coordinator of Sagoon, is a former president of NRNA-Britain. He declared that the failure to release the shares as mentioned in the contract was due to legal complications.
In fact, the investment in the Sagoon app created such havoc that the Board of Security in Nepal released a public announcement to not invest in the app. It raised a lot of confusion and in Nepal, also announced that investing in the app is illegal and investors will not receive any legal support.
As a social media app, the Sagoon was very unique and genuinely fun for users. It was increasing in a great way and held a lot of potentials to further grow.
However, it did not use its finances properly and because of the investment chaos it really brought itself down. We hope startups learn from their mistakes and grow better.