Pavel Durov, the Russian billionaire behind Telegram, is at the centre of a heated debate after he was arrested in France for allegedly failing to control criminal content on the popular messaging app.
Recent financial documents obtained by FT Alphaville reveal that cryptocurrency activities have become a significant source of revenue for Telegram, eclipsing its messaging service. The privately held company’s 2023 financials show that Telegram Group, which is based in the British Virgin Islands and has a significant operating subsidiary in the United Arab Emirates, generated $342.5 million in revenue last year. However, the company also faced a significant operating loss of $108 million.
A closer look at the profit and loss statement signed by Durov and audited by the Dubai branch in April reveals the importance of digital assets to Telegram’s financial health. In particular, “gains from revaluation of digital assets” contributed $86 million, recorded under other comprehensive income.
Telegram’s revenue breakdown further underscores its crypto focus, with its “integrated wallet” and “collectibles sale,” both relatively new initiatives for the company, now accounting for over 40% of its total revenue.
The balance sheet also reflects Telegram’s deep interest in cryptocurrencies, with the company’s digital assets of around $400 million far outweighing its cash and cash equivalents.
The related party transactions section of the financial statements reveals that Durov has made significant investments in Telegram’s future. Last year, he bought $64 million worth of the company’s convertible bonds and paid $300,000 in Toncoin to buy Telegram Premium subscriptions in a raffle.
*This is not investment advice.