Telegram Raises $1.7 Billion Through Convertible Bond Offering

Telegram, a messaging platform, has successfully raised $1.7 billion through a convertible bond offering. The bonds, which carry a 9% coupon, were issued over a five-year period and closed on May 28. The proceeds from this offering will be used to retire existing debt and provide additional liquidity for the company's operations and growth.

Out of the total amount raised, $955 million will be allocated to repurchasing bonds that are due in 2026. The remaining $745 million will be used to support the platform's ongoing operations and expansion efforts. This strategic move allows Telegram to lengthen the maturity of its debt and enhance its financial flexibility.

The new bonds offer investors the option to convert their holdings into equity if Telegram goes public before the bonds mature. In such a scenario, the notes would convert at a 20% discount to the initial public offering (IPO) price. This feature provides an attractive incentive for investors, potentially increasing the demand for the bonds.

The bond offering attracted a diverse range of investors, including both returning backers such as BlackRock and Abu Dhabi’s Mubadala, as well as new investors. This broad investor base reflects the confidence in Telegram's growth prospects and financial stability.

Telegram's co-founder, Pavel Durov, expressed gratitude for the strong investor response, noting that the demand for the bonds far exceeded the initial offering. This overwhelming interest underscores the market's confidence in Telegram's future and its ability to continue innovating and expanding its user base.

Telegram continues to attract investor attention as the crypto-friendly messaging company expands its global reach and features. The platform is widely used in the crypto community and is seen as a vehicle to facilitate mainstream adoption. The company has been proactive in disclosing IP addresses and phone numbers of criminals to authorities since 2018, responding to properly formed legal requests from authorities across most countries.

With over 1 billion users globally, Telegram has become a significant player in the messaging platform landscape. The company crossed $1 billion in annual revenue last year and holds more than $500 million in cash, not including its crypto holdings. This financial strength positions Telegram well for future growth and innovation.

Telegram's recent developments include a tentative deal with Elon Musk’s xAI, the artificial intelligence firm behind Grok. According to Durov, Telegram users will have access to Grok for 1 year, with the company receiving $300 million in cash and equity from xAI and “50% of revenue from xAI subscriptions sold via Telegram.” However, Musk later denied that a deal between the two companies was signed, with Durov responding that formalities on the deal “are pending."

Following the partnership announcement, Toncoin (TON), Telegram's sole digital asset accepted for app services, surged by over 20% to $3.69 on May 28. This surge reflects the market's positive response to the potential collaboration between Telegram and xAI, highlighting the growing interest in the platform's integration with emerging technologies.