Telegram Officially the World’s Biggest ICO With $850 Million Raised So Far
It didn’t take long for Telegram to shatter the ICO record for biggest crowdfunding campaign of all time. According to a recent filing, the popular messenger app has already raised $850 million out of an expected $2 billion.
Telegram ICO Underway
The Tether company disclosed an amount of $850 million in a recent filing with the U.S. Securities and Exchange Commission (SEC). The document indicated that the funds are being used “for the development of the TON Blockchain, the development and maintenance of Telegram Messenger and the other purposes described in the offering materials.”
The $850 million figure matches an earlier estimate of the total amount Tether intends to raise via private sale. Based on the same estimates, the company plans to raise an additional $1.15 billion via public crowdsale. A firm date for the sale is still unknown.
Funding is expected to hep Telegram expand its operations and devote more resources to development. Roughly half a billion dollars will be allocated toward infrastructure costs, such as data center, equipment and bandwidth. An additional $120 million will go toward staff, legal and office fees.
The amount raised by Telegram easily shatters the ICO record previously set by Tezos, which raised $232 million. The only other coin projects to raise more than $200 million are Filecoin and Bancor.
ICOs Getting a Bad Rap
Initial coin offerings have received criticism from those who feel the crowdfunding model is a quick way for businesses to cover their bills. At their worst, ICOs feed on investor appetite without actually providing much of a business case. The tokens themselves become speculative investments, with the “utility” aspect dependent entirely on user adoption.
By offering up an ICO, Telegram has opened itself up to similar criticism. Although the company is an established brand with hundreds of millions of active users, it is struggling with high operating costs and an uncertain financial future.
To date, the details surrounding the Telegram ICO have come from third-party sources, with the actual team failing to provide much information.
Billions of dollars flowed into ICO projects last year; depending on who you ask, that trend intensified in 2018. Recent figures from ICOData suggest that startups raised nearly $1.2 billion in January. The same source reported more than $6 billion in total funding last year.
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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