Page 5 - bne_Tech_01_2021

Leaders
January 2021 www.intellinews.com I Page 5
How much is Telegram worth?
The Western funds offered to buy 5-10% of Telegram based on a valuation of the entire business at $30bn, reports The Bell, the first time a valuation has been put on the business by outside investors.
Durov refused the offer, a source close to the talks told The Bell, which was confirmed by a second source in the talks, the Russian-language publication reported. The offer was made at the end of last week, and Durov has already rejected it, the interlocutors say.
The valuation is significantly higher than previous estimates for the value of the company. Durov estimated the “possible value” of the company
at $3-4bn in an interview with Russian business magazine Sekret Firmy in 2015, referring, among other things, to the proposals he received at that time. Telegram had about 60mn monthly active users at that time, which has now swelled to more than 500mn.
The Russian state tried to ban Telegram last year as Durov refused to hand over the digital keys to the Federal Security Service (FSB). Its end-to-end encryption has made the service uncrackable. After a very public showdown and an embarrassing failure by the Russian authorities to shut the service down, Russian lawmakers finally backed off last year and allowed the service to continue to operate. The whole fiasco only raised Telegram’s profile, attracting millions of new users.
Telegram’s image as one of the best and most secure messaging services has only been enhanced in the last six months, when it proved to be the only messaging service that Belarus' self-appointed President Alexander Lukashenko’s administration was unable to block during the mass demonstrations that took off following the disputed August 9 presidential elections.
Telegram is also widely used in Iran, where the government has also tried, and failed, to limit its use by the population that use the service to share
news and undermine the government’s monopoly control over the information flow.
On top of Telegram’s successes, its main rival WhatsApp has been suffering from reputational problems since it was bought by Facebook in 2014
for $21.8bn. At the time, WhatsApp had 400mn actively monthly users and since has grown significantly. Today WhatsApp is by far the most popular messaging service in Russia, with two thirds of Russians that use such a service, using WhatsApp.
The WhatsApp deal valued one active user at $55. Using the same active user valuation estimate would value Telegram, with some 500mn users, at $27.5bn.
“The WhatsApp rating is the simplest benchmark, but the market can be assessed as you like,” said Aleksandr Chachava, managing partner of Leta Capital, as cited by The Bell. “If they [Telegram] convince investors that they can monetise their audience by offering a good business model, the company could be much more expensive. For example, Zoom's audience is half the size, but its capitalisation is $100bn."
According to reports, Telegram has been looking for investment capital recently and asking for $1bn that would be redeemed during an eventual IPO.
Telegram spokesman Markus Ra in a conversation with The Bell admitted negotiations with potential investors are underway. But the decision "on which way to go" has not yet been made.
At the same time, Telegram does not want to take on obligations that provide for "any form of exit" for potential investors, Ra said. The company is not preparing for a sale, or a merger, or an IPO
at the moment, Ra said.
Commenting on The Bell’s report of an offer by western funds to buy a stake, Durov said that he himself had not met with any "banks and investors", but his team did receive offers to provide Telegram with a loan.