Telegram hits 900m users and nears profitability as founder considers IPO

"We see value in [an IPO] as a means to democratise access to Telegram’s value," says Pavel Durov.

In a rare interview, Pavel Durov says his secretive messaging app is making ‘hundreds of millions of dollars’ from advertising business.

Telegram has 900 million users and is nearing profitability, according to the owner of the secretive messaging app, as the company moves closer to a potential blockbuster stock market listing.

Pavel Durov told the Financial Times that Dubai-based Telegram had grown to become one of the world’s most popular social media apps while making “hundreds of millions of dollars” in revenues after introducing advertising and premium subscription services two years ago.

“We are hoping to become profitable next year, if not this year,” said the Russia-born founder in his first public interview since 2017. He added that the platform has 900 million monthly active users, up from 500 million at the beginning of 2021.

Durov, who fully owns Telegram, said the company had “been offered US$30 million plus valuations” from potential investors including “global late-stage tech funds”, but has ruled out selling the platform while it explores a future initial public offering.

“The main reason why we started to monetise is because we wanted to remain independent,” he said. “Generally speaking, we see value in [an IPO] as a means to democratise access to Telegram’s value.”

Once largely home to the freewheeling cryptocurrency community, the company, which only has about 50 full-time employees, has exploded in popularity over the past few years to become a vital communication tool for governments and officials globally, as well as a lifeline to citizens in conflict zones.

Researchers warn that the lightly moderated platform remains a hotbed for criminal activity, as well as extremist or terrorist content and misinformation. Critics have suggested that the Kremlin may have links to or leverage over Telegram, a claim that Durov dismissed as “inaccurate”.

Durov was hailed the “Mark Zuckerberg of Russia” after co-founding the country’s most popular social media network, VKontakte, in his native St Petersburg in 2007.

A free speech advocate, he founded Telegram in 2013 with his brother. According to Durov, he fled Russia a year later after refusing to share the data of certain Ukrainian users of VK with Russia’s security agency. Durov has said he sold his shares in VK to Kremlin-friendly oligarchs for US$300m under duress.

Two people close to the matter said Telegram would probably aim for a US listing once the company had reached profitability and market conditions were favourable. Durov declined to comment on a timeline or a possible venue but said Telegram had “studied several options”.

Telegram has raised about US$2m in debt financing, from a US$1m bond offering in 2021, as well as further issues of US$750m that year* and US$270m conducted last year.

Those bondholders will be able to convert the senior unsecured debt into equity at between a 10 and 20 per cent discount to Telegram’s IPO price if a float takes place before the end of March 2026 — an incentive for the company to list before that date.

In an IPO, Durov said Telegram would consider selling an allocation of stock to loyal users, following Reddit which recently announced that it would allocate a portion of its shares to retail investors ahead of a New York listing as early as March.

Durov said he had been receiving interest in carrying out a smaller equity raise. “That remains a possibility if we wanted to raise funds, for example, to fuel our [artificial intelligence] related ambitions,” he said, adding that the company was exploring introducing an AI-powered chatbot.

Messaging rival WhatsApp, owned by Meta, has 1.8 billion monthly active users, while encrypted communications app Signal has 30 million as of February 2024, according to analysis by Sensor Tower, though this data only covers 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 €1m and €10m per marketer or agency. 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 per cent 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.”

© Financial Times