Social messaging service company Telegram has filed a “Notice of Exempt Offering of Securities” with the US Securities and Exchange Commission (SEC), reporting it had raised $850 million before its planned initial coin offering (ICO).
The filing names Ton Issuer Inc. and Telegram Group Inc. along with the two individuals, Pavel Durov and Nikolai Durov, as related persons. According to the document, the money was raised “for the development of the TON Blockchain, the development and maintenance of Telegram Messenger and the other purposes.” The security is described as “purchase agreements for cryptocurrency.”
The initial expectation for the pre-sale was to raise $600 million but Telegram managed to garner massive interest from venture capital firms. The public ICO is expected to go live in March, with a target of $1.15 billion according to Bloomberg, bringing the purported total up to around $2 billion.
Opinions have been split regarding the ICO. Telegram supporters see the ICO as the blockchain investment of the century and an opportunity to back a product that poses an existential threat to Facebook. However, others believe Telegram is bilking investors out of billions of dollars based on marketing fluff and a heavy dose of FOMO — fear of missing out.
“You could see how people would say this one checks all the boxes — amazing team, a market set up for them and a good product,” said Travis Scher, vice president of investments at Digital Currency Group. But Scher said that his company isn’t investing because “the numbers are totally out of whack.”
Raman Naidu, an entrepreneur and a cryptocurrency investor with a $2 million portfolio, said Telegram’s success shows the hunger in people to invest in something valuable.
“Current ICOs, in general, have an almost negligible contribution to the society,” said Naidu. “I was discouraged by Telegram’s approach of making the concept look more like an IPO with credited venture capital firms taking part rather than an ICO ecosystem.”
Aengus Kilpatrick, a market analyst with Wells Fargo, said he’s not happy with the way it went. “It sides with lions, goes against what cryptocurrencies cubs [ICOs] are famous for. Well, money is money, so you take it and be happy,” he said.
Telegram is an instant cloud-based messaging service. It provides end to end secure messaging application. Telegram reached 180 million active subscribers in December 2017. Telegram CEO Pavel Durov said the growth rate of Telegram is justified because intensive surveillance is used by many governments on its citizens driving many users towards the platform.
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