New Details Emerge on Telegram’s Upcoming ICO
New details about the upcoming Telegram ICO emerged over the weekend, giving potential investors a taste of what the messaging app plans to do with the proceeds it collects.
ICO Target Rises
Telegram is planning to raise $2 billion through a combined public and private sale that sources say has already begun. Investors in negotiation with the company say Telegram is seeking $850 million via private sale this month, followed by a $1.15 billion public crowdraise in March. Previous reports indicated that the encrypted messaging services had set a target of $1.2 billion, although it wasn’t entirely clear if that also referred to the private sale.
Pre-sale buy-in is reportedly steep, with a minimum investment of $20 million being floated. Apparently, this is the amount private donors must pledge if they are outside CEO Pavel Durov’s inner circle.
The funds raised through public and private sales will go toward the Telegram Open Network, or TON, which has been described as a third generation blockchain.
According to Gregory Klumov, a managing partner of Exante, demand for the Telegram ICO has been so high that a secondary market is already up and running.
“Some western funds that received a pre-ICO allocation are already offering to resell since the price of the public ICO in March will be twice as high,” Klumov said, as reported by Bloomberg Markets.
But with the good has also come the bad, with scammers flooding the market with fake Telegram ICO websites. TechCrunch has already outed a number of fake websites, including Gramtoken.io, which essentially carbon copied versions of Telegram’s whitepaper. The site, which is now offline, said the project had raised more than $5 million. Fakes such as ton-gram.io, grampreico.com and tgram.cc remain live, TechCrunch reports.
Where the Proceeds Will Go
Telegram is planning to allocate $620 million of the proceeds toward development, according to Quartz, which indicated a four-year expenditure cycle. Of the total, $500 million will go toward equipment, bandwidth and data center costs. An additional $120 million will be used to cover salaries, legal and office fees.
The team currently employs 15 developers, a number that is expected to increase as it plans to quintuple its monthly users by 2022.
The TON token is expected to launch in Q4, putting Telegram on a tight turnaround schedule.
Depending on how you define ICO, a $1.15 billion public sale still wouldn’t be the biggest of all time. The EOS paywall has raised $1.3 billion since June via rolling token offering, a system that releases a new batch of tokens every 23 hours.
ICOs emerged as one of the hottest markets of 2017, with billions of dollars pouring into several hundred projects. Although the token raises vastly differ in scope, many have lofty objectives to transform industries and remove financial intermediaries. Telegram diverges from many of these projects in that it is already a viable business. This fact won’t be lost on prospective investors.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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