Telegram is about to make a profit and is preparing an IPO, says owner – 03/11/2024 – Tech

Telegram owner Pavel Durov stated that the messaging app already has 900 million users and is close to becoming a profitable business, at the same time that it is preparing to enter the stock market and carry out its first offering public.

In an interview with the Financial Times, Durov said the company has grown to become one of the world’s most popular social media apps while generating “hundreds of millions of dollars” in revenue after introducing advertising and premium subscription services two years ago. .

“We are hoping to become profitable next year, if not this year,” said the Russian in his first public interview since 2017. According to him, the number of monthly active users rose from 500 million in 2021 to 900 million, half than WhatsApp has, according to Sensor Tower, which analyzes data from digital companies.

Durov, who is the sole owner of Telegram, commented that the company has received “valuations of more than $30 billion” from potential investors, including “multinational late-stage technology funds”, but ruled out selling the platform as he studies a future initial public offering.

“The main reason we started monetizing is because we wanted to remain independent,” Durov said. “In general, we see sense (in carrying out the IPO) as a means of democratizing access to Telegram’s value”, he analyzed.

Known in its early days as the home of the cryptocurrency community, the company of around 50 employees has exploded in popularity in recent years and has become a vital communications tool for governments and authorities around the world, as well as being very relevant to those who lives in conflict zones.

Researchers warn that the platform has light moderation and remains a hotbed of criminal activity, disinformation and extremist or terrorist content. Critics have suggested that the Russian government has ties to or influence over Telegram, which Durov rejects as “inaccurate.”

“Russia’s Zuckerberg” left the country

The Telegram owner was hailed as the “Mark Zuckerberg of Russia” after co-founding VKontakte (VK), which has become the country’s most popular social network, in his hometown of Saint Petersburg in 2007.

Defender of freedom of expression, the Russian founded Telegram in 2013 with his brother. According to Durov, he fled Russia a year later when he refused to share the data of certain Ukrainian VK users with Russia’s security agency. Durov said that he sold, under duress, his shares in VK to oligarchs allied with the Russian government for US$300 million (about R$1.5 billion at current exchange rates).

Two people with knowledge of the matter said Telegram will likely seek a U.S. listing once the company turns a profit and market conditions are favorable. Durov declined to comment on a timeline or possible location, but said Telegram has been “studying several options.”

The messaging app raised about $2 billion in debt financing from a $1 billion bond offering in 2021, as well as additional issuances of $750 million that year and $270 million in 2023.

Those who purchased the bonds will be able to convert the unsecured debt into shares at a discount of between 10% and 20% compared to Telegram’s IPO price, if the public offering takes place by March 2026 — an incentive for the company to file before of that date.

For the IPO, Durov said that Telegram would consider selling part of its shares to loyal users, following what was done by Reddit, which recently announced that it would allocate part of its shares to retail investors before promoting the IPO in New York in March .

Durov stated that he has received inquiries to raise smaller capital. “This remains a possibility if we want to raise funds, for example, to boost our AI-related ambitions,” he said, adding that the company is exploring the introduction of an AI-powered chatbot.

Meta’s competitor WhatsApp has 1.8 billion monthly active users, while encrypted communications app Signal registered 30 million in February, according to analysis from Sensor Tower, although that data only covers mobile app usage.

Annual expenses were less than $0.70 for each monthly user, Durov said. As part of its efforts to generate revenue, Telegram is testing advertising in certain regions, charging a minimum of between €1 million and €10 million (R$5.43 million to R$54.3 million) per advertiser or agency . The company plans to expand its offering worldwide this year and attract smaller advertisers using automated systems.

This month, the company should begin sharing revenue with the content creators who manage its channels, promising them a 50% share of what is obtained in dollars from marketing. Additionally, the use of business accounts and a “social discovery” feature will also begin, which will help users meet or date people close to them, Durov said.

Telegram’s quest to earn advertising revenue conflicts with its reputation as a platform that avoids extensive content moderation, which has led to questions about allowing content linked to the terrorist group Hamas to remain on the platform.

Durov said Telegram plans to improve its moderation processes this year, which has elections scheduled in several countries, and “deploy AI-related mechanisms to deal with potential issues.”

But Durov rules out censoring people. “Unless they cross red lines, I don’t think we should police people in how they express themselves,” he said. “I believe in the debate of ideas. I believe that any idea must be challenged…Otherwise we can quickly move towards authoritarianism.”