It seems no matter where you look, everyone is talking about the Telegram ICO these days. The news first made headlines last month when TechCrunch reported that the messaging app service was looking to raise more than $1 billion in its initial coin offering.
This would be the largest ICO of all times, provided the tech firm reaches its goal of raising the target capital.
Pavel Durov, the CEO of Telegram, has been very active over the past few months trying to convince major investors to back his project. Reports suggest that he has already convinced over 80 major companies, including Silicon Valley giants Sequoia Capital and Benchmark to give him $850 million in a presale of his company’s cryptocurrency, in advance of the ICO.
According to one report, investors received an email explaining that Telegram is doing another private presale. While the amount of this presale was not disclosed, it is estimated to be the same size as the first round. That would mean the total capital raised will be over $1.6 billion before the ICO even opens up to the general public.
Skeptics Are Unconvinced
The ICO project has received a fair deal of skepticism. Critics have called it overly ambitious, unrealistic and technically unsound. Some have accused that Telegram is simply trying to take advantage of the all the hype surrounding Blockchain technology.
There may be some truth to these accusations. Coindesk reported earlier that Telegram has an annual operating cost of as much as $70 million. The company’s large bill has been chipping down some of the personal fortune of its owners, the Durov brothers.
Telegram ICO backers
TMT investments, a financial investor listed on London’s alternative market has already confirmed that they are backing Telegram’s ICO. The value of TMT’s investment is believed to be around half a million dollar.
Other supporters of the ICO have dismissed skepticism from the critics. Mike Raysin, the CEO of ICOBOX, stated that the target for the ICO to raise $1.2 billion is very realistic. He noted that raising $850 million is not a big deal if the company is going to scale from its current user base of 200 million to 2 billion. Telegram spends tens of millions of dollars on infrastructure alone and the company may achieve its targets easily.
The ICO is listed with the SEC which issued a notice about the presale. The notice shows that Telegram intends to use the raised capital for the development of the TON blockchain, the development and maintenance of Telegram Messenger and ‘other purposes’ that it has described in the offering materials.
Coindesk revealed that Telegram’s other purposes mainly include its intention to expand the company’s capacity as a messaging service, developing a network for cheap and quick payments and building a platform for decentralized digital identity, creating a proxy service and improving Telegram’s data storage capability.
Although it is being claimed that $850 million has already been raised for the ICO, the project is still shrouded in mystery. Most of the information about the TON project has been shared by secondary sources.
This can be quite problematic for anyone interested in investing in the project. Investors would want to get a complete disclosure about the project to evaluate the return before committing their funds. We can only hope that Telegram will make education resources more easily available before going through with the ICO.
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