Kleiner Perkins Caufield & Byers, Benchmark and Sequoia Capital have each told the messaging startup that they want to invest $20 million, according to three individuals familiar with the deal. Sequoia and Kleiner declined to comment, and Benchmark did not respond to requests for comment from the Financial Times.
Telegram, an encrypted messaging service, is seeking $1.2 billion to build a virtual economy within its mobile app. According to individuals interviewed by the Financial Times, the company plans to build a virtual economy where its “users can provide the critical mass to push cryptocurrencies toward widespread adoption.”
The app is a popular method of communication for the online cryptocurrency community. “It’s the Warren Buffett school of invest in what you know,” Steven Nerayoff, an entrepreneur and legal architect behind the ICO of Ethereum, told the publication.
Some investors, however, aren’t enthusiastic about the offering. A San Francisco cryptocurrency investor told the paper that the company’s plans were “hyperbolic claims” and a “huge red flag.” Through the ICO, Telegram hopes to raise $600 million by the end of February in a round only open to large investors ahead of a $600 million public round in March.
According to TechCrunch, Telegram was founded by Pavel Durov, a Russian entrepreneur who was the founder of VKontakte, Russia’s Facebook. He was ousted from that company in 2014 and has since worked on developing Telegram, which has 100 million monthly users and 350,000 new users joining per day.
In 2017, Telegram announced that it was introducing voice calls to its messaging app, offering audio calling that uses artificial intelligence (AI) to increase quality on an ongoing basis, as well as end-to-end encryption for security.
While the app might be a bit late in offering this latest feature, it plans to make its voice calling stand out through its use of AI. The technology uses a variety of call information, such as network speed, ping times and packet loss percentage, to optimize each call and improve the quality of future calls.