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Krypteum ICO for ‘world’s first AI investment cryptocurrency’ nets just $1m
SA startup Krypteum has raised $1-million in an initial coin offering (ICO) which ended last month and that aims to develop what it claims is the world’s first artificial intelligence (AI) powered investment cryptocurrency.
However, the amount is far less than the $4-million Krypteum hoped to raise, its founder Priven Reddy said today.
The month-long ICO for Durban-based Krypteum ended on 31 March and the startup made available 400 000 tokens — which in its white paper is valued at $112 each.
Reddy, who is also the CEO of SA mobile app development group Kagiso Interactive which owns Krypteum, told Ventureburn today in a call from Paris that he was hoping to sell 100 000 tokens, but that the company sold just 7000 tokens in the end.
“Our ICO landed at the worst possible time,” said Reddy, who acknowledged that the ICO faced “a few issues” including market vulnerability, the banning of online ads by Google and Facebook on ICOs and negative sentiment towards the rand.
He said taking into consideration discounted token prices offered during the pre-sale in December last year when the startup sold 5000 of the 7000 tokens, the startup raised about $1-million.
Our ICO landed at the worst possible time, says founder of Krypteum on ICO to fund world’s first AI investment cryptocurrency
Reddy said the company was hoping to raise about R50-million ($4.1-million) to cover the cost of further development work on the application — which he estimates will cost between R50-million and R70-million to complete.
He revealed that a US company — which he declined to name because of a non-disclosure agreement — has invested R50-million in his startup, while Kagiso Interactive has put in a minority stake too.
‘Not at full potential yet’
Those who buy Krypteum can have the startup’s system execute trades based on its own analysis without the need for any human interaction, input or approval, he claims.
Reddy says that the system trawls social media and news articles on the internet in a bid to assess which way the market will turn, when opting to buy or sell various tokens.
He says he has been working on the cryptocurrency idea for two years already and began trialling the product in August last year. While the startup has signed on about 1500 clients at present, the system is “not at its full potential yet”, he added.
But he says the system is getting “smarter and smarter every day”. “When it misses something, it learns from it,” he said, adding that the system is “almost like a life form” of its own.
In addition, the startup plans to reward data scientists who make use of the cryptocurrency and who are able to make accurate market predictions.
So far, he said “quite a few” clients had already generated returns through using Krypteum to trade cryptocurrency.
‘Returns of 35%’
Reddy explained that depending on the kind of plan that a client signs with the platform, one can generate returns of up to 35%, with the platform taking a further 15% to 25% of returns on top of this. The platform also charges a one percent withdrawal fee.
The total supply of Krypteum has been limited at 1.4 million tokens. An additional one million tokens will be made available on cryptocurrency exchanges from 1 January 2020, says Reddy.
However to counter the limited supply, the startup wants to allow those with tokens to lease these to other users who can them deploy them to conduct cryptocurrency trades on the behalf.
Reddy said he is also working with the Reserve Bank as part of the bank’s Fintech programme, to develop regulation around cryptocurrency. “With the tax implications we just want to be ahead of all these things,” he added.
He says Krypteum is expected to go live on cryptocurrency exchanges in Singapore in the coming days, which means investors will be able to use the token to trade directly with, and generate a return on the price of the token itself. Those that want to use the token by which to trade other cryptocurrency, will still need to do so through the Krypteum platform.
Featured image: Kryteum founder Priven Reddy