Ultralight Startup Telegram Stands to Gain from European Anti-American Mood

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After years of losses, it looks like the messaging app Telegram will soon turn profitable. The company has had a very interesting journey so far.

Telegram’s Journey

Telegram was founded in 2013 by brothers Pavel Durov and Nikolai Durov. Prior to setting up Telegram, Pavel had established a highly successful social network in Russia called VKontakte (VK). VK was like Facebook for Russia. People could become members upon invitations only in the university circles. Pavel wanted to use the service to remain connected with fellow graduates and to offer a networking opportunity to the professionals from Russian universities. Soon, the offering expanded to a much wider base. The service was set up in 2006, but by 2012, it had already attracted over 170 million users, along with the scrutiny and interference from Russian authorities.

VK allowed users to post dissenting commentary on Russia’s intimidating stance. The Russian surveillance services wanted VK to shut down profiles of several opposition leaders who were on the platform. Pavel refused to follow suit and had to deal with a rapid response special unit entering his apartment. While dealing with the injustice, Pavel and his brother began working on another project called Telegram. Telegram was created as an encrypted messaging platform that could be used to communicate without the security services being able to intercept messages. The app was released in 2013. By 2015, Pavel had to sell off his stake in VK at a highly discounted price of $300 million, and he left Russia for good.

The brothers and their team now focused on developing Telegram. Today, Telegram has grown its user base to more than 900 million from the 500 million it had in 2021. Now that it has the user base, Telegram is looking to monetize it. A few years ago, it introduced advertising and premium subscription models – both of which are doing well. It now plans to expand the advertising offerings within its public channels that attract more than a trillion views a month. It is also looking at monetizing through revenue sharing with the creators that run its channels, and through business accounts and a “social discovery” feature that will let users meet or date people near them.

Telegram’s high encryption standards have also made it a medium of choice for communication – especially in war-torn countries. Recent reports showed that Telegram was helping document war crimes in the Russia-Ukraine conflict, and was helping maintain the flow of information. Telegram does not share its usage statistics by country, but reports suggest that while Facebook remains the dominant player in the industry across the globe, Telegram is gaining ground in European and Middle Eastern markets. With the global mood souring against America, users and companies are looking to boycott platforms like Facebook. That should help drive growth to companies like Telegram.

Telegram’s Financials

Telegram has always remained very secretive about its financials. In an interview last year, Pavel shared that it was generating “hundreds of millions of dollars” in revenues and was approaching profitability. Other reports have revealed that Telegram has more than 12 million subscribers who pay $5 a month for added premium features. More than half of its revenue last year came from advertising.

Telegram is also known for its very lean structure. The company has a very modest count of only 30 engineers. Reports suggest that it does not have traditional departments. Instead of a recruiting team, Telegram hires by running engineering contests and challenges.

After selling his stake in VK, Pavel was committed to keeping sole ownership of Telegram. This ensured that he was not answerable to anyone on the company’s revenues, and he could remain focused on building out the platform. In 2018, Pavel raised $1.7 billion by pledging to create its own digital currency that would be given to about 170 wealthy investors. ?Investors in the round included Lightspeed Venture Partners and Sequoia Capital, along with the Russian oligarch Roman Abramovich and Jan Marsalek. Two years later, the SEC ruled that the funding round had violated several rules, and Telegram was forced to return funds to its investors. Since then, Telegram has raised $3 billion from debt rounds where it offers bonds by promising investors a 10-20% discount on an eventual public offering. No recent valuations exist, but Telegram was valued at more than $30 billion earlier last year.

The company was looking to go public in 2026, but things changed when Pavel was arrested in Paris on charges of fraud, drug use, and abuse. He has been released on bail since, and investors believe that Telegram’s valuation is climbing again.

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