How Telegram Earned Over Half a Billion Dollars Through Crypto

Telegram has made significant financial strides in 2024, earning $525 million in revenue during the first half of the year, a 190% increase compared to the same period in 2023. This surge is largely attributed to cryptocurrency-related revenue and other monetization strategies, despite some challenges related to the platform’s moderation practices and the legal issues of its founder, Pavel Durov.

Crypto Revenue Surge

Telegram’s financial growth has been propelled by its involvement in the cryptocurrency space, particularly through its Toncoin (TON). In the first half of 2024, the company reported that its cryptocurrency holdings grew from $400 million at the end of 2023 to $1.3 billion. This boost was driven by the sale of Toncoin, and the company recorded $353 million in crypto transactions during this period.

One key factor contributing to Telegram’s success was a partnership deal worth $225 million, where Telegram granted Toncoin exclusive status for small businesses to buy advertising on the app. The deal allowed Telegram to receive remuneration in exchange for the cryptocurrency’s exclusive use on its platform for advertising purposes.

Despite the fluctuating price of Toncoin following Durov’s arrest in August 2024, Telegram has continued to profit from crypto asset sales. The company’s profit after taxes for the first half of 2024 was $335 million.

Advertising and Subscription Revenue

Apart from its crypto ventures, Telegram has made significant inroads with advertising and subscriptions. For the first half of the year, the platform generated $120 million from advertising and $119 million from premium subscriptions. Telegram has been steadily expanding its advertising platform, and Durov has announced plans to allow content creators to earn 50% of the advertising revenue generated on their channels.

Additionally, the company is rolling out new features like business accounts and the ability for users to connect with people nearby, potentially further expanding its revenue streams.

Challenges and Legal Troubles

Telegram’s growth is not without challenges, however. The company has faced legal and regulatory pressure, especially concerning its moderation practices. In August 2024, Durov was arrested by French authorities and charged with crimes related to insufficient content moderation, including links to child pornography and fraud. Despite his detention, Telegram asserted that it was adhering to French law and improving its moderation efforts by expanding its moderation team and refining its content verification systems.

The company’s legal issues have been compounded by ongoing investigations from Belgium and France, which have formed a joint investigative group to tackle these concerns. Telegram has stated that it is working closely with these authorities to address the issue, but Durov’s legal troubles have raised concerns over the platform’s future.

Financial Strategy and Future Plans

Telegram has raised $2.4 billion in debt financing, with the debt due for repayment by 2026. The company used $124.5 million from its revenues to buy back bonds in September 2024. Durov has also expressed interest in an initial public offering (IPO), which could occur before the end of March 2026, potentially giving bondholders a 10-20% discount on shares.

In terms of expansion, Telegram plans to grow its advertising platform and allow businesses to create official accounts. It is also looking to enhance user engagement by introducing features like meeting people nearby, all while continuing to monetize through advertising and subscriptions.

Despite the challenges faced by Telegram, including legal issues and fluctuating crypto prices, the company has successfully diversified its revenue streams, with cryptocurrency sales, advertising, and premium subscriptions forming the backbone of its growth in 2024. As the company continues to evolve its business model, it remains to be seen how it will navigate its ongoing legal hurdles and the future of its advertising and subscription strategies.