Media reports plan to raise $1 billion for Telegram from private investors; Durov partially denies.

The Information сообщило private talks by Telegram founder Pavel Durov with banks and investors. The talks were reportedly about raising $1 billion through the issuance of convertible bonds and a public listing (IPO). Durov himself later partially denied this information.

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According to the article’s authors, the convertible debt deal and a public offering would fund Telegram’s development and expansion. Timelines for a potential offering could not be determined.

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The Information called debt financing an attractive option because it would allow Durov to retain control of Telegram longer. Until now the founder resisted selling shares to external investors.

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Telegram spokesperson Markus Ra said the company regularly receives debt-financing offers.

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“At present, we are evaluating these proposals, but no decision has yet been made on which path to take,” he clarified.

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Ra added that the company “is considering various options in line with its privacy-focused approach, but will not undertake any obligations that entail any form of mandatory exit.” The Information speculates that a “mandatory exit” would mean a merger, sale or a public listing.

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Founder Pavel Durov partly opposed the publication, but noted that his team had indeed received offers from financial institutions to provide Telegram with a loan.

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“It is not true that I met with any ‘banks and investors’ to discuss investments or financing. Our team has indeed received proposals from financial institutions to provide Telegram with a loan,” he said.

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According to Durov, the loan is one of the possible ways for Telegram to “remain fully independent and true to its values in pursuing its monetisation strategy.”

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Against the backdrop of changes to WhatsApp’s privacy policy and Twitter and Facebook’s hardline stance on Donald Trump and his supporters, Telegram downloads surged — user numbers exceeded 500 million per month. This led to a significant rise in the costs of maintaining the messenger’s infrastructure, which to date has been funded solely by Pavel Durov’s personal funds.

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Additionally, in April the deadline for money repayment to investors of the blockchain platform Telegram Open Network (TON) approaches. Investors say that although the company returned part of the money, some European sponsors are still owed their original investments plus 10%. The exact amount of remaining payments is unknown.

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Back in February and March 2018, TON conducted two rounds of a closed ICO and raised $1.7 billion from 175 investors in the US and abroad.

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On 30 April 2020, Durov notified investors that the launch would not proceed due to a clash with the U.S. Securities and Exchange Commission (SEC) and a U.S. court ban on distributing Gram tokens.

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In a letter to American investors, the company declined further participation in the project, allowing them to reclaim 72% of their invested funds. The rest were told they would receive nothing in Gram or other cryptocurrencies, but were offered to convert their TON investments into a loan at an annual rate of 52.77% to aim at recovering 110% of their initial investments in 2021.

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As part of the settlement of the dispute, Telegram paid the SEC $18.5 million. Investors are to be repaid a total of $1.224 billion.

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In December 2020, Durov outlined plans to monetize Telegram. Later he clarified that the company will not collect data about users for targeted advertising and would not show ads in private chats. Telegram is also considering paid features, such as subscriptions.

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