Telegram app rides high on thirst for trustworthy news

In the days after Vladimir Putin’s invasion of his country, Ukraine’s president, Volodymyr Zelenskiy, used his Telegram channel to send a defiant video message from the centre of the capital, Kyiv, calling on the nation to unite and resist the Russian attack.

The WhatsApp-like messaging service, co-founded by exiled Russian billionaire brothers Pavel and Nikolai Durov, has become a key weapon in a digital propaganda battle that will ultimately boost its usage and investor profile ahead of a possible $50bn stock market flotation next year.

Ukraine’s 44-year-old president, a former TV actor and comedian who campaigned over Telegram in the run-up to his landslide victory in the 2019 presidential election, used the service to refute claims that the army had been told to lay down arms, that an evacuation had been ordered – and to galvanise the populace by proving he would not be leaving the capital.

A video grab of the defiant message Ukraine’s President Volodymyr Zelenskiy sent on Telegram.
A video grab of the defiant message Ukraine’s President Volodymyr Zelenskiy sent on Telegram. Photograph: AFP Photo

Telegram, which has more than 550 million monthly users globally, is already Ukraine’s most popular messaging app. The service’s much-hyped encryption and its ability to disseminate messages to groups of up to 200,000 – the limit on Facebook-owned WhatsApp is 256 members – has seen it dubbed the “app of choice” for terrorists.

Telegram was banned in Russia in 2018 after Pavel Durov refused to give the authorities access to its user data. However, the crackdown, which included blocking IP addresses, was easy to circumvent, and the service continued to grow. Russia gave in and lifted the ban in mid-2020.

The app has been adopted as a leading source of news outside state-controlled media, and in the Ukrainian war it has become a 24-hour news lifeline for civilians, journalists and even the military.

It has become the go-to platform for protest groups of all kinds, from Extinction Rebellion to anti-vaccination groups, from the US Capitol rioters to pro-democracy campaigns in states including Russian-allied Belarus, Hong Kong and Iran.

But Telegram’s role in the dissemination of unverified information alarmed the 37-year-old Durov – who has been called the Russian Mark Zuckerberg, after he founded what is still by far the country’s most popular social network, VKontakte (VK), in 2006.

Last weekend, he said he was considering shuttering the service in the “countries involved” for the duration of the conflict.

“We do not want Telegram to be used as a tool that exacerbates conflicts and incites ethnic hatred,” Durov posted on Sunday.

Hours later, he changed his mind, following mass requests from users, who said it was their only source of information. “Double-check and do not take on faith the data that is published in Telegram channels during this difficult period,” Durov advised.

Jamie MacEwan, media analyst at research service Enders, said. “This is another example of Telegram being linked to resistance movements. It has very much been part of its reputation over the past couple of years as it has boomed. It is associated with being a safe haven.”

Telegram logo seen on a mobile phone screen in front of Facebook and Twitter logos
Telegram is regarded as a safe haven for resistance movements. Photograph: Pavlo Gonchar/Rex

Durov is known for occasional eccentric behaviour – he once threw paper aeroplanes made from bank notes out of VKontakte’s office windows, causing fights in the street below, and he publicly offered Edward Snowden a job. He is now on a mission to make his second tech venture the success story that was ultimately wrested from him first time around.

During anti-Putin protests in 2012, Durov became hugely popular for refusing to close down groups that were using the social media site to organise marches. Two years later, he was on the receiving end of a hostile investor coup that saw VK appropriated by Mail.Ru group, headed by Russian billionaire and Putin ally Alisher Usmanov. In December, the Kremlin strengthened its grip on the company when Russian insurance company Sogaz, founded by giant Gazprom, took control of VK.

Durov sold up and left the business as well as the country, becoming a citizen of St Kitts & Nevis in the Caribbean, after resisting Kremlin pressure to release the data of Ukrainian protest leaders.

It is little surprise that Telegram, which he launched with brother Nikolai in 2013 and is operationally headquartered in Dubai, is built on security and privacy.

The publicity-averse Durov, who has a penchant for dressing all in black nevertheless spends much of his energy criticising the security standards of rivals, most notably world leader WhatsApp.

In recent years security experts have in turn questioned Telegram’s claims of superiority, pointing out that, unlike rivals, it does not offer end-to-end encryption by default over all its messaging options.

Moxie Marlinspike, creator of the popular Signal secure messaging app, took to Twitter last week to remind Ukrainians that Telegram is not as encrypted as people think, after what he alleged was a “decade of misleading marketing and press”.

Telegram is the most popular messenger in urban Ukraine. After a decade of misleading marketing and press, most ppl there believe it’s an “encrypted app”

The reality is the opposite-TG is by default a cloud database w/ a plaintext copy of every msg everyone has ever sent/recvd.

— Moxie Marlinspike (@moxie) February 25, 2022

Durov’s experience at VK left him with an aversion to bringing in outside investors to fund Telegram. With a fortune estimated at over $17bn, he has been able to support it for most of its early life without outside help. But the search for alternative ways to raise the funds necessary to drive growth led him into an ultimately disastrous foray into the world of cryptoassets.

In 2018, Durov embarked on a plan to raise billions through the launch of a cryptocurrency called Grams, a venture that sparked an investigation by the Securities and Exchange Commission (SEC) in the US.

Pre-sales ahead of the planned initial coin offering (ICO), which would have funded a proposed Telegram Open Network (TON) system of apps services and a store of digital and physical goods, drew a rapturous response from an initial select group of investors, raising $1.7bn.

But two years later, Telegram shut TON down and agreed an $18.5m settlement with the SEC, which had argued that Grams bypassed US financing laws. It ordered that the money be returned to investors.

The setback in fundraising has not slowed growth, however: in early 2021, Telegram reported the biggest user boost in its history – 25 million in 72 hours.

Durov, who is now also a French citizen, credited the rush of new Telegrammers to an announcement by WhatsApp clarifying its privacy policy relating to data sharing with parent Facebook. Durov added, rather grandiosely: “We may be witnessing the largest digital migration in human history.”

The WhatsApp policy did not include sharing the content of messages, but it spooked many users, who defected to other platforms anyway: Telegram and Signal were the biggest beneficiaries.

“The increasing downloads of Telegram is [partly] driven by consumers’ growing anxiety over the power of the biggest tech companies, and by privacy concerns,” says Forrester analyst Xiaofeng Wang.

A few months after that user boost, Russian business newspaper Vedomosti reported that unnamed sources close to the company claimed a $50bn initial public offering was on the cards by the end of next year.

A successful IPO would cement the rise of Telegram, which has begun to make headway on the extremely difficult proposition of making money from the users of messaging services.

Durov, who once vowed Telegram would never carry ads, is seeking to monetise the platform through a combination of “privacy-safe” advertising and sponsorship of channels.

“The timing of the emergence of talk of an IPO is quite telling, coming almost immediately after the early 2021 boom when its user potential started to explode,” says MacEwan at Enders. “I think the momentum they now have, the sheer weight of users, and the fact they are experimenting with ‘privacy safe’ advertising make them an attractive flotation candidate.”

A Telegram spokesman confirmed that the company is pursuing plans for an initial public offering, and that some pre-IPO bonds have been sold with a five-year expiry, but cautioned that the timeline is not certain.

“As for the IPO plans, they will depend on the economic situation at the time,” he said.

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