Telegram raises more than $1 Billion in debt financing

Telegram raises more than $1 Billion in debt financing by selling bonds

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Telegram raises more than $1 Billion in debt financing www.financialstand.com

Telegram has raised more than $1bn through bond sales to investors including Abu Dhabi state funds, as the encrypted messaging app tries to capitalize on a surge in users.

In his Telegram channel, chief executive Pavel Durov said the company had raised the funds from “some of the largest and most knowledgeable investors from all over the world”, but did not share further details.

Late on Monday Mubadala Investment Company and Abu Dhabi Catalyst Partners announced that they had joined the funding round with a $150m investment. Abu Dhabi Catalyst Partners is a joint venture between Mubadala, the Gulf emirate’s large sovereign wealth fund, and the $4bn New York hedge fund Falcon Edge Capital.

The Kremlin-controlled Russian Direct Investment Fund told the Ria Novosti news agency it had also invested in Telegram — apparently capping a remarkable embrace of the app after Moscow abandoned fruitless efforts to ban it last year. But Durov told the Financial Times that RDIF “definitely did not” invest in the messaging app. “We wouldn’t be open to any transaction with this fund,” Telegram said.

The encrypted messaging app, which is headquartered in Dubai, received an influx of new users earlier this year after concerns about forthcoming changes to the privacy policy of Facebook-owned rival WhatsApp prompted users to seek alternative platforms.

Telegram, which says it now has more than 500m active users, also received a boost as larger platforms Facebook and Twitter clamped down on hate speech in the wake of the US Capitol riots on January 6, while the encrypted messaging app has remained lightly moderated.

Its surging popularity has increased the costs Telegram faces to maintain the service. Durov has said the company plans to remain independent but generate revenue by introducing some paid-for premium features and selling advertisements in public Telegram channels as soon as this year.

Investors would be able to convert the senior unsecured debt into equity at a 10 percent discount to Telegram’s initial public offering price, according to materials sent to potential investors in February.

The materials said Telegram also had the potential for “developing additional non-ad revenue streams”.

In June last year Telegram agreed to return more than $1.2bn it had raised from investors through an initial coin offering in 2018 and pay an $18.5m civil penalty to settle charges brought by the US Securities and Exchange Commission, which had argued the offering violated federal securities laws. Telegram did not admit or deny the SEC’s allegations.

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