Of Course China’s Forgotten Social Network Is Doing An ICO
ICOs were one of the breakthroughs in the tech industry in 2017. Initially it was just those in the blockchain space who were aware, but as the year went on a number of existing business grew attracted to the idea of raising money without the usual route of VCs and lost equity.
The year ended with more than $4 billion raised via ICOs. It’s fair to say that the concept is widely-known and that has has already been proven in early 2018.
Witness exhibit A: Renren, the company that was once-hailed as China’s Facebook but has reinvented itself in recent times after losing China’s social battle, is doing an ICO — also known as token sale.
China banned ICOs (and bitcoin) last year, but Renren can qualify as a U.S. firm since it is listed on the New York Stock Exchange. While that might circumvent the Chinese ban, it is sure to raise attention among the SEC, which has already taken action against ICOs that violate securities laws.
Renren did not reply to a request for comment and clarification.
The company’s Facebook-like service ran out of steam in China as Tencent’s WeChat messaging app and Weibo’s Twitter-like service rose to dominate the country’s social media landscape. Rather than folding, Renren went after new areas including logistics, payments and even hardware via a flurry of investments from 2014-2016.
Now it is focusing on social again with RRCoin, a token that it plans to sell via an ICO, according to TechCrunch’s Chinese partner Technode. The plan is to develop a platform for social media that will allow other apps to connect with users ultimately rewarded with incentives for engagements, although it appears that the full whitepaper for the token sale has not been released yet.
That’s not unlike the strategies behind Brave (BAT) and Kik (KIN) which aim to incentive user engagement with “attention-based” tokens, but it is hard to see how this move will revive Renren given the company’s years-long slump.
WeChat and Weibo are just too far ahead at this point. For a Western perspective: Would the same approach breathe new and sustainable live in Western social has-beens Friendster or MySpace? Unlikely, and that’s the same issue here.
One area where Renren may be on to a formula with a higher chance of blockchain-based success is trucking.
That’s sounds odd for a company rooted in social media, but it is doubling down on the trucking space after it acquired U.S.-based Trucker Path, a social platform for the trucking industry with an apparent 600,000 users. The company also offers an app that connects transportation brokers with carriers.
Renren had previously invested in the startup, but now it added a magic word to its future plans for the business: “blockchain.”
That’s right. Near the end of the short announcement of Trucker Path’s acquisition is the following quote from Renren chairman and CEO Joseph Chen.
“Currently, the two major emerging technology areas are artificial intelligence and blockchain. With the acquisition of the Trucker Path social platform and the Truckloads freight marketplace, the Company will be well-positioned technologically to drive innovation within this important industry.”
The company plans to focus on the business side of Trucker Path and introduce the blockchain.
To be fair, there are actually good uses-cases for the blockchain in the world of logistics, from tracking foods, to a global ledger for freight and general logistics, so this isn’t quite as absurd as the iced tea company that shoved ‘blockchain’ into its name for stock price benefits. But still the plans are vague at this point, although that isn’t deterring investors.
These two announcements have sent Renren’s share price upwards, with the stock price jumping more than 75 percent since trading resumed on January 2. That’s not quite crypto-like gains — bitcoin jumped 18-fold during 2017 — but it is another sign that established businesses are looking at the blockchain.
– By Jon Russell (@jonrussell)