I believe that this social networking framework has a great future.
Look at these projects which created using this engine: Minds https://www.minds.com Pleio https://pleio.nl GCconnex and GCcollab https://github.com/gctools-outilsgc/gcconnex
There is even a Platform that will make building apps based on Elgg easier https://wzm.me/
Right now this project needs more cotributors to help it develop even more https://github.com/Elgg/Elgg
I read the landing page, clicked about, looked at the first page of the API docs and it's still not really obvious to me what it is for or how it's actually used.
What problem is it solving? Standard web backend for common social media platform stuff?
Basically, yes it's, you can make own online community, or niche social network for your users/products. But this is very useful to make unique social app based on an open source framework.
If you want to launch startup then social interaction between people is very important and Elgg allows you to do it quickly. In addition, it's very secure code with wide features for growth and integration with other applications.