Tech
Telegram nears profitability with 900M users; founder considers IPO.
Telegram nears profitability with 900M users; founder considers IPO.
Telegram has become a prominent player in the constantly changing social media and messaging app market, having recently achieved 900 million users. Telegram’s visionary founder, Pavel Durov, provided insights into the company’s path toward profitability and possible initial public offering (IPO).
Durov highlighted Telegram’s impressive revenue growth, attributing it to the successful implementation of advertising and premium subscription services introduced two years ago. This strategic move has reportedly led to the generation of “hundreds of millions of dollars” in revenues, positioning the company on a path towards profitability in the near future.
With a user base of 900 million monthly active users, a substantial increase from 500 million at the beginning of 2021, Telegram has solidified its position as one of the leading social media apps globally. Durov, who fully owns Telegram, disclosed that the company has received valuation offers exceeding $30 billion from potential investors, including global late-stage tech funds. Despite these lucrative offers, Durov emphasized the company’s commitment to independence, signaling a potential IPO as a means to democratize access to Telegram’s value.
The rise of Telegram from a platform popular among the cryptocurrency community to a vital communication tool for governments, officials, and citizens in conflict zones underscores its growing influence and reach. However, concerns have been raised regarding the platform’s moderation practices, with researchers flagging it as a breeding ground for criminal activity, extremist content, and misinformation. Durov dismissed claims of Kremlin influence over Telegram, emphasizing the platform’s independence and commitment to free speech.
Durov’s background as a co-founder of VKontakte, Russia’s leading social media network, and his subsequent creation of Telegram in 2013 with his brother, highlight his role as a free speech advocate and tech innovator. His principled stand on data privacy led him to flee Russia in 2014, following a dispute over user data sharing with Russian authorities.
Looking ahead, Telegram is exploring the possibility of a US listing once profitability is achieved and market conditions are favorable. The company has raised significant funds through debt financing, with bondholders potentially converting debt into equity at a discount during an IPO. Durov hinted at the prospect of offering loyal users a chance to own a stake in the company through stock allocations, aligning with recent trends seen in Reddit’s decision to involve retail investors in its upcoming IPO.
Comparative messaging service WhatsApp, which is owned by Meta, has 1.8 billion monthly active users, while Signal, an encrypted communications app, has 30 million as of February 2024, according to an analysis by Sensor Tower. However, this data is limited to mobile app use.
Yearly expenses stood at less than 70 cents for each monthly user, Durov said. As part of its effort to generate revenues, Telegram has been testing advertising in certain regions, mandating a minimum spend of between €1 million and €10 million per marketer or agency.
Plans to expand offering globally
This year, it plans to expand the offering globally and to smaller advertisers using automated systems.
The company this month will introduce revenue sharing with the creators that run its channels, promising them a 50% cut of marketing dollars.
In addition, it is also introducing business accounts and a “social discovery” feature, which will help users to meet or date people near them, Durov said.
Telegram’s bid for advertising dollars is at odds with its reputation as a renegade platform with a hands-off approach to moderation, which recently drew scrutiny for allowing some Hamas-related content to remain on the platform.
Durov said Telegram planned to improve its moderation processes this year as multiple global elections unfold and “deploy AI-related mechanisms to address potential issues”.
But “unless they cross red lines, I don’t think that we should be policing people in the way they express themselves”, said Durov. “I believe in the competition of ideas. I believe that any idea should be challenged . . . Otherwise, we can quickly degrade into authoritarianism.”
As Telegram navigates its path towards profitability and a potential IPO, the tech world eagerly watches to see how Durov’s vision for the platform unfolds, balancing growth opportunities with the preservation of its core values and commitment to user privacy and independence.
