Sirin Labs, the Swiss-Israeli technology firm founded and by led by Moshe Hogeg, said on Thursday it had so far raised about $115 million in an initial coin offering to support the development of a smartphone and other products using open source blockchain technology.
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ICOs are being used by startups like Sirin that use cryptocurrency technologies like blockchain to quickly raise capital by issuing virtual tokens to investors instead of stock. ICOs have become more common in the past year, but Europe’s top markets regulator warned last month they were “extremely risky and highly speculative investments.”
In Sirin’s case, the proprietary token is called SRN, and Hogeg said the company had sold some 147,000 of them to about 5,600 investors around the world in a presale to big investors and a crowd sale to small ones that began on Wednesday and would run another 12 days.
“These are our potential clients. We think they will be the first to buy the phones,” Hogeg told reporters at a news conference. He told the news conference that the ICO’s success was due to four months of work identifying potential investors.
The company declined to break down figures for how much it raised in the presale, which began three months ago and was limited to investors willing to put in at least $1 million. While most of these investors bought SRNs, $10 million in non-SRN funds were also invested.
In addition, Sirin offered investors an unusual option of getting their money back within 60 days through a “Buy-With-Guarantee” track that Hogeg said had been taken by about half the investors. That means the capital Sirin has raised isn’t ensured for another two months when the options expire.
Hogeg said his target had been to raise $75 million – the estimated amount needed to develop the phone. The additional funds will enable the company to increase its production and invest more in sales and marketing.
Sirin had earlier made a name for itself with the highly secure (and highly expensive) Solarin smartphone. The Finney line it is now developing will include a smartphone and personal computer running on the company’s Sirin OS operating system and using the SRN as its default cryptocurrency.
Sirn has recruited soccer superstar Lionel Messi to be its brand ambassador for its new Finney line of blockchain-based electronics.
Hogeg said despite all the talk about blockchain and its value as a secure system, the technology is extremely complicated and only a few are actually using it.
The company said the phone, which should be on the market in about nine months, benefits from enhanced security and the ability to carry out fee-less transactions. It will sell for $999, compared with $15,000 for the Solarin.
With reporting by Reuters.