Social media start-up Sagoon seeks to launch mini-IPO in the US
Social media and e-commerce start-up, Sagoon, has filed mini-IPO papers with US Securities and Exchange Commission to raise about $20 million
New Delhi: Sagoon Inc., a social network and e-commerce start-up with offices in Washington DC and Delhi, is set to tap US capital markets through its proposed mini-initial public offering to raise as much as $20 million, a top executive at the firm said.
The two-year-old start-up, founded by Govinda Giri, an immigrant from Nepal who worked at the Pentagon for 12 years, recently filed papers with the US Securities and Exchange Commission (SEC) and is expected to launch the proposed mini-IPO in the third week of December.
It takes about 70 days for mini-IPOs to receive US SEC approval.
As per the new rules, known as Reg A+, by the US SEC, small companies can raise as much as $50 million by issuing securities to accredited and non-accredited investors in any 12-month period through the mini-IPOs.
Sagoon is selling 869,564 shares of common stock at a share price of $23, to fetch as much as $20 million in total, Giri said.
A part of the proceeds from the IPO would be utilized to set up a campus in India, while the remaining would be used to expand its team in India, the US and Nepal, setting a technology laboratory at Indian Institute of Technology Delhi, research and development for technology enhancement, back-end operations, marketing and branding and other general purposes.
“The capital from the process would be utilized just for the first phase of our expansion which is scheduled to be completed by the end of next year. After that, we will commence our second phase of expansion that will include our foray into the Chinese market,” said Giri.
Sagoon is a social e-commerce platform which helps users connect with like-minded people and share ideas. It offers features like My Day to create and share schedules and to-do lists, and set reminders; Secret Sharing to secretly share a learning, finding, experience or a thought; and Mood Talk emoticons and stickers for a group or private chat.
Giri, who is also the chief executive of the firm, founded Sagoon with Swati Dayal who comes with over eight years’ experience in web and mobile development, and Kabin Sitoula who has 20 years of experience in finance and marketing.
Sagoon was launched as a search engine in 2009 but later developed into a social commerce platform in 2014.
Sagoon has managed to raise around $500,000 from friends and family.
It has also closed an equity funding of $1.8 million by diluting about 10% stake in the company to expand the platform’s user base, enhance product infrastructure, and develop and launch a mobile app.
On an average, about 13,000 people sign up on Sagoon every month. It has a total of over 400,000 members in 100 countries and 1.2 million are on a waiting list.
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