Telegram is looking for additional funding ahead of the April deadline, when it will have to pay off investors in its failed blockchain project TON, The Information reports.
Under the terms of the agreement with the US Securities and Exchange Commission (SEC), Telegram was allowed to leave 30% of the $ 1.7 billion raised for the launch of the project.According to investors, part of the money was paid, but Pavel Durov’s messenger still has debts to some European creditors. with whom he agreed on the return of the original amount with interest constituting a tenth of it. How much money is still to be paid is unknown.
According to official information from the SEC, Telegram Group Inc. and TON Issuer Inc. started raising money for the creation of a blockchain project in January 2018 and sold 2.9 billion Gram tokens to 171 buyers worldwide, including over a billion tokens to 39 US investors. It was assumed that they will receive their tokens by October 31, 2019, together with the official launch of the blockchain platform. However, shortly before this date, the court, at the request of the SEC, banned the distribution of Gram. On May 12, 2020, Durov officially announced the termination of work on TON, citing the actions of the SEC as the main reason.
The Information writes that Telegram has been considering opportunities to raise funds for several months, but as April approaches, the need for it has increased. In particular, we are talking about the collection of several hundred million dollars through debt instruments, which will then be converted into shares in the course of a possible public offering of the company. One of the sources said that the amount of funds collected by Telegram could exceed $ 1 billion.
“Telegram is constantly contacted by many parties with proposals for debt financing,” said company spokesman Markus Ra. – We are currently evaluating these proposals, but have not yet chosen a further path. The company is considering various options in accordance with its privacy-oriented idea, but will not undertake any obligations that would involve an exit event in any form. ” Such an event could mean a merger, sale or public listing, explains The Information.
Also, according to the publication, debt financing can be a tempting opportunity for Durov, as it will allow him to maintain control over the messenger for longer. To date, it has refused to sell shares to third-party investors, citing a desire for independence and the “lifetime guarantee” it has provided to its users in this regard. Together with their brother Nikolay, they are the co-founders and sole owners of the company.
The sale of convertible debt in anticipation of a potential listing on the stock market, the proceeds from which may further support the expansion of Telegram, will allow Durov to finance the company’s activities prior to this listing. When it might happen is unknown. If he is destined to come true, Durov can organize a structure with two classes of shares, thanks to which he retains control over the company, for example, putting up for sale shares without voting rights.
In December 2020, Durov revealed plans to launch advertising on Telegram channels to monetize the messenger, while promising not to collect user data for targeting purposes. Additionally, Telegram can launch paid features like subscriptions.
The recent increase in the number of downloads of the messenger made the need to raise capital even more urgent, writes The Information. On Tuesday, Durov announced that the number of active Telegram users per month exceeded 500 million, and in three days more than 25 million users were added to it. He noted that last year the average was 1.5 million new users per day.
Recall that Pavel Durov wants to monetize Telegram.
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