Sirin Labs is an Israeli blockchain startup dedicated to developing a blockchain smartphone. The project was financed via an Initial Coin Offering (ICO). The bull market in 2017 brought together $ 158 million.
Sirin Labs is now in controversy because the company may be considering just software for mobile phone manufacturers. This is from a report by Bloomberg. Although the first batch of the Sirin mobile phone called “Finney” will be delivered in December, the project is financially tight. So the company faces a serious financing problem, reported Bloomberg. The funds available should therefore be used up in six to twelve months.
Sirin responded to this in a statement on Medium and defended his actions. The presentation of Bloomberg was out of context, the company said. Rather, they weighed the risk carefully and developed a mobile phone with a relatively small budget. It is believed that Sirin has enough capital to become profitable, even in today's difficult market. Regarding the abandonment of the hardware business, the company said that this would only be possible if Finney did not find enough buyers. But that is not to be suspected, because you have many orders. Also, it is important to remember that the business model has always provided for the distribution of the operating system “Sirin OS” to other mobile phone manufacturers.
Sirin ICO and Finney
Last year, the company received the funds for relatively vague promises. Sirin wanted to develop a mobile phone that allows users to trade and use cryptocurrencies. It should be noted that the mobile phone market is highly competitive and is already dominated by large companies such as Samsung, Apple and Huawei. Priced at $ 999, the Sirin mobile phone is also in the upper price bracket. As rivals there compete the fully equipped flagships of the competition.
Sirin Labs told Bloomberg that the budget for Google Pixel mobile phones alone was $ 200 million. Apparently they wanted to indirectly show how small their own budget is.
The company may have failed to adjust the required amount in its initial coin offering. Also, perhaps one has overestimated the power of mere integration of cryptocurrencies there. There is also a risk to the company that one of its major competitors is targeting one of its models in cryptocurrency. This could make the entire business model of Sirin Labs obsolete. It is also possible, of course, that Sirin found a niche and succeeded.
Sources: Bloomberg, Medium, Pixabay
Author: Peter Joost – Source Post: https://www.kryptovergleich.org/158-millionen-usd-ico-crash-show-that-the-necess-for-stressgerer-regulation-fuer-icos/
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