Eligma - due diligence report

ICO date: Presale - 20 March 2018 12:00:00 UTC - 10 April 2018 11:00:00 UTC
Public crowdsale - 17 April 2018 11:00:00 UTC - 8 May 2018 11:00:00 UTC
Ticker: ELI
Token type: ERC-20
Token price: 0,10 USD
Token allocation: 60 %
Presale: yes, goal is to collect 16 000 000 USD (15 % bonus)
Country of registry: Slovenia - http://www.bizi.si/ELIGMA-D-O-O/
Supply: 500 000 000 ELI (fixed supply)
Accepted currency: ETH
Soft Cap: 4 000 000 USD
Hard Cap: 24,000,000 USD

Summary

75%

Team: 4/5
Product: 4/5
Token use case: 3/5
Token sale: 3/4
Roadmap: 3/3
Community: 2/3
Hype: 2/3

Pros:

Large market to disrupt with predicted strong growth in the future
Cooperation with BTC City
The first phase of the platform is already being tested, also a beta version of the mobile wallet and the POS system
A strong team with proven successful projects in the past
6 strategic partnerships
Reasonable hard cap
Vesting period of 2 years

Cons:

Whitepaper shows only the idea, not much from the technical side or platform architecture side
Crypto payments are enabled on the platform on Q1 2021 according to the roadmap
About one year of waiting until there will be the official release of the platform for broad public
11 advisors receive 5% of all tokens
Wide range between the soft cap and hard cap
No individual caps

Description

A platform for commerce with the goal being to save time that users spend on searching and purchasing products by utilizing artificial intelligence. It will advise users, which item to buy by taking into account item components, quality, price, shipping time and costs as well as other factors.

The project is focusing on several key trends and problems identified in traditional retail as well as online shopping and offer a set of previously impossible or unanticipated solutions to discover, purchase, track and resell items. Eligma aims to become an AI-driven and blockchain-based platform that acts as a personal commerce agent.

Team

There are about 22 technical developers in total working on the project. Team has solid representation in Sales, design and marketing. A bit discouraging for investors may be that there are 11 advisors will receive 5% of all tokens.

Dejan Roljič - Founder & CEO - One of his latest successes was ABC Accelerator (which he founded), an accelerator dedicated to high-tech companies from the South and Central Eastern European regions with offices in Ljubljana, Silicon Valley, Munich, Kiev, and Sarajevo. As off today, ABC and Dejan invested in more than 80 startups from around the world. Dejan also co-owns a software development company with 120 employees. He also founded a 3D printing start-up and at the same time began investing in various innovative companies.
https://www.linkedin.com/in/dejan-roljic-50a90912/

Matej Gregorčič - Co-Founder - He founded a marketing agency and took it from selling ideas in a shared office space to becoming one of the biggest event management agencies in Slovenia. Also, he is a CEO and Founder of Viberate - a platform that joins the entire live music ecosystem under one roof. It acts as IMDB for live music, where profiles are ranked according to their online popularity, based on daily updated social media stats, recent content, gig dates, and contacts.
https://www.linkedin.com/in/matejgregorcic/

Jože Mermal - Co-Founder - Since 1993 he has been successfully managing the BTC company (http://www.btc.si/en/about-us/) as the President of the Management Board. Based on his initiative, a BTC City-one of the largest business, shopping, entertainment, recreation and cultural centers in Europe was established. Spread over than 400,000 m2 it yearly attracts more than 20 million visitors. Under his management, BTC founded ABC Accelerator, Slovenian Science Foundation and the International management school IEDC Bled.

Alexander Danilov - Chief Technology Officer - More than 10 years of experience in IT and a solid knowledge in building web-services and development processes. He acquired most of his knowledge leading projects related to billing systems, data processing algorithms, user interface and APIs. He has, in particular, knowledge in software architecture design and development of high load services.

Boštjan Mrak - Lead Machine Learning Engineer - Machine learning engineer with a deep learning specialization and software development background. He also built a complete eCommerce system for one of the largest sports nutrition stores in Slovenia and has about 18 years of software development experience.
https://www.linkedin.com/in/bostjan-mrak/

Product

The platform is reaching into a segment where the volume of sales reached 2.3 trillion U.S. dollars in 2017 and is anticipated to double in the next four years (Statista, 2018). Online shopping is one of the most popular online activities worldwide. In 2016, retail e-commerce sales worldwide amounted to 1.86 trillion U.S. dollars and e-retail revenues are projected to grow to 4.48 trillion U.S. dollars in 2021 (Statista, 2017).

The BigCommerce survey revealed that 67 % of Millenials and 56 % of Gen Xers prefer to search and purchase on e-commerce sites rather than in a store. Both groups spend on average 6 hours shopping online per week. (BigCommerce, January 2018)

Preferences to buy in-store vs. online are different amongst different categories, but with every year the percentage of online sales is growing. The second-hand market has its own specifics but is also growing rapidly. Annual net revenue of eBay, currently the largest used goods marketplace, has grown by 7 % in 2017 and has reached almost 10 billion U.S. dollars.

Discovery will use a deep neural network-based product recommendation engine to find the best deals for products users are looking for. Eligma algorithm will also offer alternative solutions that match the users’ requirements so there will be no need to search for products in thousands of online sources anymore. A single shopping cart and checkout process will suffice to complete purchases in multiple online stores at once and cryptocurrency payment gateway will enable users paying with cryptocurrencies, even if the online store they are buying from does not support them yet. Eligma will create a blockchain-tracked Digital Item Profile (DIP) for every item purchased through the platform, where users can store several records, including Proofs of Purchase. It will be stored on blockchain protected database - Implementation of a decentralized database that utilizes the InterPlanetary File System and is protected by the Ethereum network and its blockchain (sidechain).

Every DIP will be automatically written into the user’s inventory. In order for the user to have an overview of all the items in his household, he will also be able to manually add elsewhere purchased items. Within the inventory, users will be able to see the AI-predicted current and future item value. Eligma’s household trading agent will notify users when the best time to sell the product and automatically generate and publish listings on selected second-hand online stores 10 with a single click. Eligma will act as a trusted intermediary and ensure fairness of contractual terms or it can be managed by a smart contract.

Eligma will consolidate retailers in an integrated open-loop universal loyalty system and provide a simple and convenient user interface. There will be no need to register with a standalone loyalty program for each merchant and users will be able to redeem acquired ELI tokens with any other network member.

The team will develop a code scanning open source code to be used use within the Eligma mobile app or through the APIs implemented in any third party application. With it, users will be able to scan the barcode (EAN, UPC) or QR code of a product displayed in a physical store. The app will recognize the product using the existing Eligma`s database and provide users the exact description of the product and best ways to purchase the product.

Eligma will be in compliance with General Data Protection Regulation (GDPR) from its inception and user data privacy will be respected according to the required standards.

The project is already collaborating with BTC City which lies in Ljubljana, Slovenia and encompasses more than 10,000 brands, 3,000 companies, 450 stores and 70 bars and restaurants. It annually hosts over 20 million visitors. The first phase of the online platform is already developed and is currently operating in test mode. It already supports payments in some cryptocurrencies (BTC, BCH) and more will follow shortly. The platform is curated by the enterprise start-up BTC City and is enabling users to purchase products, offered by the offline retailers in the BTC City area.
Eligma’s main revenue stream will at first come from an affiliate program that is performance based. While Eligma will serve as a window to all the different online stores and marketplaces by merging them under one roof, the affiliation program will track the sales in stores, to which users will be redirected and Eligma will receive a commission on those purchases. This module is very popular amongst sellers since they benefit in terms of marketing, visibility, site visits and consequently higher sales. It enables additional marketing that is free until the purchase is actually made.

Also, there will be offered different advertising modules according to different posting places, sizes, frequencies, and durations. This feature will be payable with fiat currencies as well as more popular cryptocurrencies. When advertising will be compensated with ELI tokens, users will receive additional advertising rewards.

Token use case

Users will be able to earn loyalty tokens not only by performing certain actions on the platform, but also by making purchases at any other online or offline merchant, included in the program, or by simply buying them on an online exchange. The majority of platform features will be free but some of them could only be unlocked with ELI tokens. With the adoption of cryptocurrencies, ELI tokens will be used for purchases at all merchants involved in the platform´s loyalty program.

The main use case of the tokens could be categorized as:
Product hunt - When ordering a product hunt, a certain user’s balance of ELI tokens will be locked. If Eligma discovers a product that fulfills the user’s requirements, tokens will be released to Eligma and returned to the user otherwise.
Second-hand listings - Users will have the option to push an item in their inventory to all the second-hand online stores, connected to our platform. Eligma will require users to utilize ELI tokens to perform this service.
Escrow fees - When a seller creates a listing and selects Escrow service as a possible feature to complete the sale, he will be required to deposit ELI tokens for the service.
Decentralized Item Sale - When a seller and a buyer decide to complete an item sale in a decentralized way, they will have to deposit the amount of ELI tokens, equivalent to the item price, as a motivation to successfully fulfill contract obligations.
Advertising - ELI tokens can be utilized for advertisement space on the platform. • Other Eligma solutions ELI tokens will be used for other Eligma’s solutions in both the offline and online worlds. The first such solutions will be the POS systems and the marketplace for our partner company BTC City.
Purchasing selected items - Eligma will offer a limited amount of pre-selected items, which users will be able to buy with ELI tokens only.

Merchants will have a merchant account on the platform and with it the opportunity to reward their loyal customers. Few examples:
Every purchase is rewarded - When a customer purchases something, the merchant can give away ELI tokens as a “cashback” reward. This option is possible for either online or offline purchases. Merchant’s benefit: Growing sales
Backtrack rewarding - As the Eligma system is already gathering information about customers’ purchases, a merchant will be able to decide he wants to reward everyone, who bought a certain product from him in the past. Merchant’s benefit: Better recognition and positioning, which result in better future sales.
Product rewards - Merchant can announce that every purchase of a product during a time period will result in an ELI token reward for the customers. Merchant’s benefit: Better sales of a specific product he wants to promote or sell out.

Users can use the token as an incentive to be active on the platform:
Wishlists resulting in sales - When a created wishlist results in a direct sale, the user who published the wishlist will be rewarded with ELI tokens.
Social media actions - When a social media share or post results in a direct sale, the user who created the post will be rewarded with ELI tokens. Users will be able to withdraw ELI tokens to their private Ethereum wallets or online exchanges and trade with them.

Cryptocurrencies are becoming more and more recognized amongst the wider population and are slowly stepping into the mainstream. According to research, credit cards remained the online shoppers’ preferred payment method worldwide in March 2017 and cryptocurrencies reached 3 %. This percentage is anticipated to increase, since the last research conducted in July and August 2017 in Germany already showed that 11.4 % of participants are expecting to use cryptocurrencies for conducting payments in the future. (Statista, 2017)

Token sale:

Totally a 60% of the whole fixed supply will be sold to the public. Tokens, not distributed in the presale phase, will be transferred to the next phase. Unsold tokens in the crowdsale phase will be transferred to a fund, dedicated to rewarding plans for Eligma platform users. If the equivalent value of all contributions will not reach the soft cap, all contributions will be returned to the contributors’ Ethereum addresses. All tokens will be distributed after the completion of the last phase and will be locked (non-transferable) for a short validation period.

Vesting periods for the tokens:
Tokens allocated to the team will have a vesting period of 2 years
Tokens allocated to the advisors will have a vesting period of 2 years
Tokens allocated to the future partners will have a vesting period of 3 years
Tokens allocated to the community and user growth will not have a vesting period.

Roadmap

The roadmap is extensive enough and shows the ambition of the developers and long-term commitment to the project.

First investment in the project was in September 2017 and it was 1.5M EUR. All the funds received in the ICO will be divided into three budgets: Development, Marketing, Scaling. Each will be 8 million USD.

First integrations for real-life testing in retail stores in the BTC City area will begin in March 2018. During this testing phase, there will be careful monitoring of the product and improvement where necessary. This testing phase will end in Q3 2018 and by then the plans are to have at least a 10 % coverage in the area. In April 2018, the launch of the beta version of the online platform-BTC marketplace is taking place, testing the platform through the summer of 2018 and then launch of a national marketing campaign in September 2018. The goal is to have the whole pilot product up and running at the beginning of 2019, with retail stores coverage of at least 30 % in the area. For some reason, the cryptocurrency payments will be enabled on the platform not sooner than Q1 2021.

Community, marketing

The platform was covered in Slovenian, Turkish and international media.

Their Medium blog has 10 readers. The Bitcointalk thread started on 1st March and has an active admin. Youtube channel has about 54 subscribers and three videos. On Linkedin, they are followed by more than 450 people. Telegram is most active of all social media and has a member base of 4800 people. Their Twitter account has 1743 followers. Their Facebook is followed by more than 130 000 people. The disproportion between the Twitter and Facebook follower base may be caused by that Facebook is more preferred social media in the region of Central Europe in comparison to Twitter.
All in all, we can categorize this project as low to mid hype right now. The social media which are most common for speculators in cryptocurrency are Telegram and Twitter. Eligma does not have large follower base on these social media.

Medium: https://medium.com/eligma-blog
Bitcointalk: https://bitcointalk.org/index.php?topic=3043993.0
Youtube: https://www.youtube.com/channel/UCfshAN27bKPe4f3uBIr7jjA
Linkedin: https://www.linkedin.com/company/eligma/
Telegram: https://t.me/eligma
Twitter: https://twitter.com/eligmacom
Facebook: https://www.facebook.com/eligmacom