Page 4 - bne_Tech_01_2021

Leaders
January 2021 www.intellinews.com I Page 4
Durov rejects Western funds’ offer to buy 5%-10% of Telegram with $30bn valuation
Russia’s most famous tech entrepreneur and the creator of the Telegram messaging service has rejected an offer by Western funds to buy a 5%-10% stake in the company with a valuation of $30bn, reports The Bell, citing investors with knowledge of the deal.
The news comes as Telegram’s user base has soared in the last weeks after rival service WhatsApp announced it would share more user data with its parent company, Mark Zuckerberg’s Facebook, leading to a mass exodus from WhatsApp by users over privacy concerns.
The ultra-secure Signal messaging service, which has become increasingly popular amongst Russians, also saw its user base expand, albeit to a lesser extent.
Western investors have been looking for a way to recoup some value after they invested $1.7bn into Durov’s TON blockchain project that could have become a major disrupting technology for businesses like credit cards.
The money was raised with two ICOs (Initial Coin Offerings) in February 2018 and in April the same year in the biggest ICO ever. Durov initially offered to launch the TON blockchain in the autumn of that year or give investors their money back. However, progress was slow and Durov asked for, and received, several delays from investors.
But the project went completely off the rails last year after the US Securities and Exchange
Commission (SEC) banned the project completely and Durov cancelled it.
“Today is a sad day for us here at Telegram. We are announcing the discontinuation of our blockchain project. Below is a summary of what it was and why we had to abandon it,” Durov announced on his Telegram channel on May 12, 2020.
Telegram raised $1.7bn from 171 investment funds and wealthy individuals during the ICO in early 2018, including 39 US investors. The SEC launched a lawsuit in October 2019 claiming that TON was an unregistered securities sale. In March 2020, a US judge ruled that Telegram cannot launch its blockchain or issue the Gram tokens until the case has been resolved.
Some commentators speculate that the US credit card industry had put pressure on the
US government to ban TON, as it could have undermined the whole industry, worth hundreds of billions of dollars, and they were keen to quash the competition before it could become established.
The court ruling and Durov’s decision to kill
the project off have left investors wondering how they can extract some value from their investment. That has left them eyeing the Telegram messaging service, which remains privately owned, and Durov has already promised that the investors into his 2018 ICO may be compensated with shares in Telegram.