Magma Venture Partners has invested a US$400,000 seed fund in GetGems, the project and team that created the social messaging app of the same name. CEO Daniel Peled and the GetGems team made the announcement on January 4.
Speaking to Cointelegraph, Ran Achituv, a general partner with Magma VC, described his company as “an early-stage fund, founded in 1999 by Modi Rosen and Yahal Zilka,” focusing on “first-of-a-kind investments” by “identifying trends and shifts and disruptions as early as possible.”
Achituv added that this was Magma VC’s first time investing in a cryptocurrency company, and that it was decided that GetGems had “what it takes” to earn their decision for investment in the crypto 2.0 project:
“[We] looked at Bitcoin a year ago, met 5 to 10 companies, and decided it wasn’t the time. We started re-looking at this about 3 weeks ago and met 10 plus new companies in the [cryptocurrency] domain. ... We look in a company for 4 D's: disruption, differentiation, distribution and D'he [the] team, and we got a strong YES on all 4 with the Gems team.”
Both companies are based in Israel. Magma VC states on its website that the location is prime for up-and-coming tech companies. Israel offers “a unique, exciting, and unprecedented innovation hub,” he says, and “represents the largest concentration of Start-ups per-capita worldwide, is the global leader of successful Start-up companies second only to Silicon Valley, and ranks second globally in the Start-Up Ecosystem Index.”
GetGems is a social messaging app that offers encrypted messaging based upon the open-source software of Telegram plus a cryptocurrency wallet. The Android version of GetGems was released in beta just days ago and is available in the Google Play store. The iOS version will be available later this year.
GetGems looks and operates much like Telegram, but with its own sleek look and many extra features, including an in-app wallet for storing both GEMZ tokens and Bitcoin, along with an airdrop referral program that will motivate users to bring their friends onboard. GetGems plans to add more cryptocurrency options in the future.
In the meantime, Telegram brings capabilities to GetGems such as up-to-200-person group chats, self-destructing message options, and an established “base community of users,” which was just one of the many “internal mechanisms” that won Magma’s partners over.
“I installed [the app] a few days ago for the first time,” said Achituv, “and when I opened it, I already had something like 100 of my friends available for chatting.”
Achituv emphasized the importance of trust in making investment decisions:
“People say ‘Bitcoin is risky.’ At the end of the day the worst case scenario is you lose 100% of your investment. You know the statistics in venture [capital]. So you should be afraid of the bleeding edge. However you need to employ strong logic and business sense. ... In the Gems case, it's a full house on all parameters. We're not investing in Bitcoin at all. Some might confuse it. We invest in cryptocurrency; the blockchain and what it enables from a user and ecosystem perspective.”
He called GetGems a “value 3.0 project” because of the way it pays value to its users:
“Intrinsically, fundamentally, the way Gems views your attention is the right way to go. You should be compensated for that. So if someone wants to show you an ad, he can transfer some value to your view: GEMZ. ... The blockchain is what enables the transfer of value. You just couldn’t do that before.”
GetGems has been called one of 19 crypto 2.0 projects to watch in 2015. It has sold over 35 million GEMZ (the spelling of the official token), and as of January 2 had earned over 2,200 BTC in the crowdsale of GEMZ that began over a month ago through Koinify.com.
The countdown clock is winding down, and today is the last day to purchase GEMZ through the presale. According to Tom Kysar, marketing lead at Koinify, withdrawal of GEMZ from Koinify wallets has been disabled during the crowdsale “to prevent any arbitrage and to ensure a fair and transparent sales process for everybody.” Withdrawal will be re-enabled, with 2-factor authentication, to your Android Gems wallet, a Counterwallet on the Counterparty.io platform, or “any exchange that onboards” the tokens on January 10. At that time, Kysar said via Skype, “GEMZ will be released into the wild!”