How Telegram Made Over $500M Thanks to Crypto?

Telegram’s income soared to $525 million within the first half of 2024 earlier than its founder, Pavel Durov, was arrested on costs of felony exercise on the platform.

In response to Financial Times, Telegram has advised traders that Durov’s detention by French police has not had a “materials influence” on the app. Monetary stories confirmed the worth of the corporate’s cryptocurrency holdings rising, bolstering the enterprise.

Telegram’s digital belongings rose to $1.3 billion within the first half of 2024, up from practically $400 million on the finish of the earlier 12 months, in response to unaudited monetary stories. The capital enhance and proceeds from the sale of Toncoin (TON).

The state of affairs worsened in August when the corporate’s founder was detained by French authorities and charged with a sequence of costs.

Nonetheless, in an Oct. 22 investor report, the corporate stated the arrest had not considerably impacted its enterprise, as the fees have been towards its founder alone. Telegram additionally reported income of $525 million for the six months to the tip of June, up 190% from the identical interval a 12 months earlier. Practically half of that, $225 million, got here from a one-time cope with an unnamed associate during which Telegram granted Toncoin unique standing for small companies to purchase promoting on the app.

“Below the phrases of the deal, Telegram “obtained remuneration” in alternate for permitting the cryptocurrency Toncoin to be the unique methodology for small companies to purchase promoting on the app.”

Regardless of some fluctuations within the worth of Toncoin following Durov’s arrest, Telegram has continued to generate income from crypto asset gross sales. Within the first half of 2024, the corporate recorded $353 million in cryptocurrency transactions and reported a revenue after taxes of $335 million, demonstrating its monetary power.

Regardless of the present profitable monetary state of affairs, consultants warn that the corporate could face difficulties in future promoting income as a consequence of its hyperlinks to sexual violence and terrorist content material. Telegram has confirmed the necessity to preserve management over content material and enhance its moderation system.

Though Durov wholly owns Telegram, he has additionally raised about $2.4 billion in debt financing, which should be repaid by 2026. This September, the corporate used a few of its proceeds to purchase again $124.5 million in bonds.

How Telegram is rising income by way of promoting and subscriptions

Earlier, Durov spoke about Telegram’s plans to extend income from promoting and subscriptions, much like the enterprise fashions of competing platforms. Within the first half of the 12 months, promoting income was a file $120 million, whereas premium subscriptions introduced in $119 million.

The sources point out that the corporate profitably collected its crypto belongings utilizing favorable market circumstances, however the main technique stays linked to promoting and paid subscriptions.

Due to the location of $1 billion in bonds in 2021, Telegram raised about $2 billion, writes the FT. The businesses predicted an imminent IPO, however in a dialog with the FT, Durov declined to touch upon the potential timing and platform for the itemizing. If the location is accomplished earlier than the tip of March 2026, bondholders can convert them into shares at a 10-20% low cost.

“Typically talking, we see worth in [an IPO] as a way to democratize entry to Telegram’s worth.”

Durov additionally spoke about plans to broaden Telegram’s promoting platform and the intention to supply content material creators 50% of the income from promoting on their channels. The corporate may even introduce enterprise accounts and a brand new function permitting customers to fulfill folks close by.

Durov’s arrest

Telegram’s revenue is stable regardless of Durov’s current authorized troubles. He was detained on Aug. 24 on the Paris airport as a consequence of Telegram’s inadequate moderation and refusal to cooperate with authorities, which made him a suspect within the distribution of kid pornography, fraud, and different crimes. The businessman was launched on bail of €5 million and was obligated to report back to the police station twice weekly.

The corporate acknowledged in its report that it maintains its content material moderation practices and cooperation with judicial authorities in strict accordance with relevant French legislation, is enhancing its content material verification methodology, and is increasing its moderation crew.

It was later revealed that Belgium had been investigating Telegram since 2020 and would cooperate with the French authorities.

In response to De Standaard, the nations have created an investigation group by way of which the competent authorities of each nations will alternate the outcomes of their investigations and can be capable of perform joint actions.