How Telegram made over half a billion dollars thanks to crypto?
Telegram’s revenue soared to $525 million in the first half of 2024 before its founder, Pavel Durov, was arrested on charges of criminal activity on the platform.
According to Financial Times, Telegram has told investors that Durov’s detention by French police has not had a “material impact” on the app. Financial reports showed the value of the company’s cryptocurrency holdings rising, bolstering the business.
Telegram’s digital assets rose to $1.3 billion in the first half of 2024, up from nearly $400 million at the end of the previous year, according to unaudited financial reports. The capital increase and proceeds from the sale of Toncoin (TON).
The situation worsened in August when the company’s founder was detained by French authorities and charged with a series of charges.
However, in an Oct. 22 investor report, the company said the arrest had not significantly impacted its business, as the charges were against its founder alone. Telegram also reported revenue of $525 million for the six months to the end of June, up 190% from the same period a year earlier. Nearly half of that, $225 million, came from a one-time deal with an unnamed partner in which Telegram granted Toncoin exclusive status for small businesses to buy advertising on the app.
“Under the terms of the deal, Telegram “received remuneration” in exchange for allowing the cryptocurrency Toncoin to be the exclusive method for small businesses to buy advertising on the app.”
Despite some fluctuations in the price of Toncoin following Durov’s arrest, Telegram has continued to generate revenue from crypto asset sales. In the first half of 2024, the company recorded $353 million in cryptocurrency transactions and reported a profit after taxes of $335 million, demonstrating its financial strength.
Despite the current successful financial situation, experts warn that the company may face difficulties in future advertising revenue due to its links to sexual violence and terrorist content. Telegram has confirmed the need to maintain control over content and improve its moderation system.
Although Durov wholly owns Telegram, he has also raised about $2.4 billion in debt financing, which must be repaid by 2026. This September, the company used some of its proceeds to buy back $124.5 million in bonds.
How Telegram is growing revenue through advertising and subscriptions
Earlier, Durov spoke about Telegram’s plans to increase revenue from advertising and subscriptions, similar to the business models of competing platforms. In the first half of the year, advertising revenue was a record $120 million, while premium subscriptions brought in $119 million.
The sources indicate that the company profitably collected its crypto assets using favorable market conditions, but the primary strategy remains linked to advertising and paid subscriptions.
Thanks to the placement of $1 billion in bonds in 2021, Telegram raised about $2 billion, writes the FT. The companies predicted an imminent IPO, but in a conversation with the FT, Durov declined to comment on the possible timing and platform for the listing. If the placement is completed before the end of March 2026, bondholders can convert them into shares at a 10-20% discount.
“Generally speaking, we see value in [an IPO] as a means to democratize access to Telegram’s value.”
Durov also spoke about plans to expand Telegram’s advertising platform and the intention to offer content creators 50% of the revenue from advertising on their channels. The company will also introduce business accounts and a new feature allowing users to meet people nearby.
Durov’s arrest
Telegram’s income is solid despite Durov’s recent legal troubles. He was detained on Aug. 24 at the Paris airport due to Telegram’s insufficient moderation and refusal to cooperate with authorities, which made him a suspect in the distribution of child pornography, fraud, and other crimes. The businessman was released on bail of €5 million and was obligated to report to the police station twice weekly.
The company stated in its report that it maintains its content moderation practices and cooperation with judicial authorities in strict accordance with applicable French law, is improving its content verification methodology, and is expanding its moderation team.
It was later revealed that Belgium had been investigating Telegram since 2020 and would cooperate with the French authorities.
According to De Standaard, the countries have created an investigation group through which the competent authorities of both countries will exchange the results of their investigations and will be able to carry out joint actions.
