Telegram's Financial Health In Question: A Roadblock To $30B IPO?

Recent reports have shed light on the financial health of popular messaging and social media platform Telegram. Contrary to the robust image portrayed by CEO Pavel Durov, the company’s financials suggest a different story.

What Happened: Telegram, which boasts more than 900 million users, recorded a loss of $108 million on a revenue of $342 million in the previous year.

Durov had reportedly been contemplating an Initial Public Offering (IPO) for the company, targeting a valuation of $30 billion.

However, the disclosed financials have raised questions about the feasibility of such a lofty valuation, particularly in light of the multiple charges Durov is currently facing from French authorities, reports the Financial Times.

Interestingly, a significant 40% of Telegram’s total revenue is generated from its crypto services, which include a digital wallet for crypto coins and a platform for selling digital collectibles.

Also Read: Musk Considers Limiting His Travel Following Telegram CEO Arrest: ‘Wise For Me To Limit Movements’

This heavy reliance on cryptocurrency, particularly Toncoin, has led some to perceive Telegram as “a crypto firm with a sideline in messaging.”

When compared to the revenue of other tech giants like Coinbase, Twitter, and Reddit, Telegram’s financial performance falls short. This, along with Durov’s legal issues and the company’s controversial no-moderation policy, might make a potential IPO a tough sell.

Despite these hurdles, some observers believe that Telegram’s lean operation – a team of just 50 – could eventually yield substantial margins as the business matures.

However, it appears that Durov might need to implement significant changes to his business model to satisfy regulators and potential investors.

Why It Matters: The revelation of Telegram’s financials and its heavy reliance on crypto services could have significant implications for the company’s future. The potential IPO, if it happens, will be closely watched by investors and industry observers alike.

The company’s ability to navigate its current challenges, particularly its legal issues and the need to diversify its revenue streams, will likely determine its future trajectory.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.