December 8, 2023

Telegram this week raised $210 million in a bond sale from investors including its founder and CEO Pavel Durov, as the economic slowdown wiped out interest in a public market listing. Case.

The messaging app, which is used by more than 800 million monthly users, raised funds through a bond issue worth $270 million. John Hyman, chief investment advisor at Telegram, told TechCrunch: “Because interest rates have risen significantly since 2021, these bonds have been issued at different prices.”

Durov said Telegram is still not profitable and that the new funding is aimed at bringing it closer to a “break-even” point, claiming his app is “closer to absolute profitability” than rivals such as Twitter and Snap.

Durov said a group of “well-known funds with good reputations” bought the bonds, but did not name them. The backers are “highly sophisticated global funds that specialize in bonds,” Telegram’s Heyman told TechCrunch.

Durov said in the post that he “personally bought” about a quarter of the new Telegram bonds, investing “tens of millions of dollars in Telegram’s growth.” Durov said he spent hundreds of millions of dollars on the app over the past 10 years to keep it running.

In recent years, despite the continuous emergence of new social products, Telegram has continued to grow rapidly. The app has added more than 300 million users in the past two and a half years, attracting 2.5 million new signups every day.

Improving its financial position and becoming self-sufficient is an even bigger challenge for the Dubai-based company. Telegram has kickstarted its monetization engine in recent years, including launching a subscription service, raising more than $1 billion in debt financing through the sale of a five-year pre-IPO convertible bond more than two years ago.

Telegram has been looking to go public for years — it even attempted a token sale (but was blocked by the SEC) — but persistently weak global market conditions mean it will have to continue to rely on private investors to fund its operations.

Several other social media startups, including Twitter, Discord and Reddit, have had their valuations slashed by mutual fund investors after Meta and Snap wiped tens of billions of dollars off their value in the public markets.