Telegram closed its pre-sale ICO at record-breaking numbers. The team sent a document to the U.S. Securities and Exchange Commission (SEC) in which they claim that they have generated $850 million, so far. The SAFT backed ICO was aimed at major venture capital firms and other cryptocurrency whales. For putting money in early, these investors will receive discounts on the platform’s GRAM tokens. The public token sale is set for March and the team anticipates it will raise another $600 million more. However, that number may grow after the immediate success of the Telegram pre-sale.
The messaging app was founded by Russian entrepreneurs Pavel and Nikolai Durov who banked on their social media company VKontakte. Telegram runs very similarly to WhatsApp but is said to be more secure. Its current business model currently makes no revenue, as Pavel Durov currently pays for all the app’s expenses via the $300 million made from their first social media company. The Telegram website reads:
“Pavel Durov, who shares our vision, supplied Telegram with a generous donation, so we have quite enough money for the time being. If Telegram runs out, we will introduce non-essential paid options to support the infrastructure and finance developer salaries. But making profits will never be an end-goal for Telegram.”
With a growing user base, currently over 180 million users, eventually the company was going to run out of funds and this is how the company chose to raise its funds. The Form D they filed with the SEC indicates that Telegram intends to use its proceeds for the development of the TON blockchain, the maintenance and continued development of the Telegram messaging app and the other purposes described within the offering material given to its investors.
Despite all the excitement around the mobile messaging application and the insane amount of money raised in its pre-ICO, some individuals remain unimpressed. There have been many critics that have questioned the app’s security in the past. The app doesn’t encrypt its messages by default and many just assume it does, but it must be turned on as an additional setting.
There is also harsh scrutiny of its official whitepaper. Charles Noyes, a Protocol Analyst at Pantera Capital, made a statement about the Whitepaper saying:
“The entire thing should have a disclaimer attached: ‘all of the technical things we said this will do are completely unproven and have not been subjected to outside scrutiny. They’re promising something that will somehow be radically better than everything else out there, with no real explanation of how that will happen or outside scrutiny of those claims.”
In addition to the pushback on the app’s security and promises, there have been various scams surrounding the ICO. Many site claim to give people access to backdoor deals in the upcoming public Telegram ICO and have ripped numerous people off. Honestly, there is no way to prevent this and scammers will take any opportunity they can to rip off uneducated investors, especially in the “wild west” of the crypto world.
Telegram’s evaluation is currently in the billions and some people are unimpressed. Spencer Bogart, a partner at Blockchain Capital, said: “Their limited partners are calling them saying, ‘What are you doing? This is the biggest airball in venture history. It was an absurd valuation for something that’s effectively field stage.”
However, despite the criticism the company raised a pre-ICO that far surpassed figures of other actual ICOs. Hundreds of millions of users use the Telegram App on a daily basis and have strong loyalists. We will continue to see how this ICO rolls out the closer it gets to its public launch.
What are your thoughts? Do you use Telegram?
Featured Image: CryptoDaily