People ask us many times:

Why do you need an ICO, if you have a working system, and you generate revenue?

A legit question. There are several reasons to tokenize the ecosystem, but why don’t we simply start working with it without a public token sale? Here are the business and social reasons:

Rapid growth

Apart from some angel size investments during the implementation in Vietnam, TE-FOOD is basically self-funded.

All three co-founders have extensive background in business. Trung Dao Ha is an established businessman in Vietnam, while Erik Arokszallasi and Marton Ven have two successful IT companies since 21 years, with an annual revenue of ~1,300,000 EUR (2016 revenues are available for Erba 96 Ltd, and Flexsys Ltd.).

There are three funding paths to build up TE-FOOD:

bootstrapping /self-funding

equity investment

pre-selling usage right (token sale)

The following chart shows how we estimate the effect of the different scenarios to the implementations, where the Y-axis shows the number of countries in which TE-FOOD has implementation.

TE-FOOD could prosper with self-funding, but due to liquidity reasons, it would take around 2 years to implement TE-FOOD in a new country.

Our PPP (Public-Private-Partnership) business model means that our revenue comes from

the sales of identification materials, and

charging for system transactions,

so we don’t have an implementation fee. This provides stable, constantly growing, long term revenue stream, but requires a larger upfront investment from us, as one country-wide implementation requires $1.5–2.5 million investment and 8–12 months of work by several professionals, depending on the size of the country.

With equity investment the growth could be a bit faster, but liquidity issues could require regular investor search campaigns for new investment rounds, which could drastically reduce the active work.

As we planned to implement blockchain by all means, a token sale provides the revenues for an ideal growth rate. Since our system is ready, it works fine in the 3rd largest country in Southeast Asia, and we have a well-polished implementation methodology, we have all necessary elements to scale the solution with an accelerated pace.

Social impact

Beside building a sustainable business, we should not forget the social impact of TE-FOOD. It improves food safety, mitigates the effects of food frauds, reduces corruption within the food industry, and builds trust among consumers, authorities, and the supply chain.

If you have a solution, which can massively reduce the number of 700 million illnesses and 400,000 deaths caused by foodborn diseases each year, it means responsibility to spread the solution as quick as possible.

Food safety is a common cause of all people on Earth, and while it might not be as apparent in the developed world as it is in the developing countries, it should be a priority for everyone.

Such phrases, that “we have the right to know what we eat” are no longer just phrases to us. As all three co-founders have children, it’s a mission to create a better world to them.