Inside Telegram’s pitch: $1B revenue, 9% interest, and a 2026 IPO on ice
Israeli institutions weigh high returns against governance and reputation risks.
Telegram, the popular encrypted messaging app, is actively courting Israeli institutional investors as part of a sweeping $2 billion bond offering launched this month, Calcalist has learned. While the majority of the fundraising will take place abroad, Telegram representatives have been holding meetings with financial institutions in Israel in an effort to raise at least NIS 300 million locally (approximately $85M).
The company is offering a dollar-denominated annual interest rate of 9%, along with conversion options for bondholders. Institutions that join during the initial offering phase will be able to convert their holdings into equity over a five-year term. Telegram had planned an initial public offering (IPO) for 2026, and according to its founder Pavel Durov, the company was valued by potential investors at over $30 billion. However, those IPO plans were suspended after Durov was arrested in Paris in mid-2024.
The arrest, linked to a French police investigation into Telegram's alleged failure to monitor illicit content, was short-lived. Durov denied the allegations, the investigation was closed without charges, and he was released after four days. Still, the episode cast a shadow over the company’s ambitions, and added a layer of risk that Israeli institutions are now weighing.
Strong Financials, Controversial Governance
According to information presented to Israeli investors by Phoenix Underwriting, a unit of the Phoenix Group that is assisting with the local bond raising, Telegram ended 2024 with around 1 billion users, more than $1 billion in annual revenue, and $500 million in cash, excluding its crypto assets. The company reportedly turned a profit during the year, though exact figures were not disclosed.
Despite these numbers, many institutional investors remain cautious. Two main concerns have surfaced in meetings with Israeli funds. First, Telegram's corporate governance is seen as opaque and highly centralized. Durov is the company’s sole owner, director, and CEO - an unusual structure for a firm of its scale and global footprint. It lacks a formal board of directors or any visible mechanisms for oversight.
Second, Telegram’s reputation is a growing liability. Its encrypted messaging platform has been widely used for illegal activities, including drug and arms trafficking, and the distribution of exploitative and violent content. The app was a major channel for the circulation of graphic videos following Hamas’s October 7 attacks on Israel and in the weeks that followed.
Replacing Old Debt, Offering High Returns
This is not Telegram’s first foray into debt markets. In 2021, it raised $2.35 billion through two rounds of bond sales. Its remaining debt, $1.72 billion, is due in full this coming March, prompting the current fundraising effort to refinance existing obligations.
Notably, the bonds are institutionally traded on the New York Stock Exchange and not available to the public. They are also volatile: after Durov’s arrest last year, the yield on Telegram’s bonds soared to nearly 17%, signaling investor concern over the company’s ability to service its debt. That figure has since dropped to 7.7%, but still reflects a relatively high-risk profile. The 9% interest offered to Israeli institutions may be designed to compensate for lingering investor skepticism.
In previous bond rounds, one of the participants was Mubadala, Abu Dhabi’s sovereign wealth fund. Durov, who left Russia in 2014 after refusing to hand over data on Ukrainian users to Russian security services, has since relocated to Abu Dhabi.
Durov, often dubbed the "Russian Mark Zuckerberg," built his first tech empire, VKontakte, while still in his twenties, before selling it to Kremlin-linked oligarchs.
