How Telegram Makes Money
Pavel Durov has always been saying that he had no intentions to monetize Telegram, which was hard to believe. And the majority of curious minds agreed that $300 million that Durov sold his Vkontakte stake for was indeed a lot of money and an unlikely amount to be spent entirely on Telegrams development without making any attempts to monetize the messenger. Three years later there werent not only any signs of monetization, but also Pavel Durov expressly refused to sell Telegram, although some rumors suggested he had received a $5B offer from one of the tech giants.
Everyone was about to jump to the conclusion that Pavel and the team knew how to grow such projects without raising money, but in mid 2017, rumors, hazy at first but then ever more specific, started to ooze out on the Internet that developers behind Telegram who were following their leader in traveling between Berlin, London and Dublin back then, were seriously working on a proprietary cryptocurrency dubbed TON.
Its worth noting that 2017 was the year of an extraordinary price jump in cryptocurrencies and of Telegram surpassing the 180 million users mark; therefore the speculation that Durov «was in» indeed, i.e. decided to dive into crypto, looked very well-reasoned. However, as 2017 was approaching its end, the case remained unclear for outsiders.
First Two Funding Rounds
Rumors were supported in January next year when TechCrunch published a piece about the upcoming ICO of Telegram. Referring to unnamed sources and, as it turned out later, using the projects white paper, the publication reported that entities controlled by Durov intended to raise around $500 million during Q1 2018 in a pre-sale valuing the total supply of coins at about $5 billion. It was also reported that 4 percent of tokens are reserved for the development team, with around 48% of the total supply up for sale, which was meant to enable authors of the new blockchain to clamp down any market manipulation and speculation attempts.
Scammers, of course, couldnt resist the temptation to misuse such news, and so they did creating tens of websites in an instant where they attempted to sell «Durovs coins» to general public in some way or another, and, as its usually the case, not without some success.
The crook party was quickly over, however, as the token sale (the token is, in fact, called Gram, while TON is the platforms name) was planned to be held in three stages with the first two being closed, i.e. only people and organizations pre-selected by developers to be allowed to participate. By that time all tokens have already been issued, with no perceived coin mining in future. On the other hand, half of the coins were transferred to the TON Reserve, another entity under control of the developers, whose mission is to prevent from unnecessary Gram price fluctuations.
Finally, the first funding round was completed on February 13, and the second round on March 29, 2018. The process was arranged in compliance with the Securities and Exchange Commission rules, which, on the one hand, disabled individuals and entities that were subject to U.S. sanctions at the time, on the other hand, let everyone curious about the amounts raised know the figures because SEC is obliged to publish the outcome of any such investors pastime activities.
As it turned out, Telegram Group Inc. and TON Issuer Inc., companies that co-authored the new blockchain network, charmed the total of slightly less than 200 investors who contributed $1.7 billion of funding. Russian businessmen, like Roman Abramovich, were rumored to be among the initial investors, although well-informed people assure that Durov is wary of funding from his fellow countrymen.
This amount made TON ICO the largest to date, that is if we disregard Venezuelan governments story about $5 billion raised from selling their Petro coins. By the way, this Petro thing may very well be true, you know, Venezuela knows how to surprise the world.
Well, whatever the reason but after a short break developers announced that the third ICO round, the public one, was canceled altogether. Some say because almost $2 billion is well enough, while others think Durov decided to keep low key to avoid unnecessary attention from the U.S. regulators.
Anyway, no one even tried to raise funds for crypto and blockchain-related projects in a similar amount ever since. Whereas TON developers went quiet for a while sitting on a pile of cash enough to buy an aircraft carrier.