Telegram was rated a third of Google or 10% of Slack

VTB Capital, one of the agents for the upcoming placement of convertible bonds of the Telegram messenger, assessed the company for investors using different methods and came to results that differed by 50 times. It makes sense to buy bonds because of the high yield, writes the investment bank.

Analysts at VTB Capital believe that in 2022 Telegram could be worth between $2.2 billion and $124 billion (the document is available to The Bell). The minimum estimate is obtained from the least favorable EV/Sales multiplier for the messenger (the ratio of company value to sales), the maximum is from the EV/DAU multiplier (cost to daily audience).

According to EV/Sales, Telegram, according to the forecast of VTB Capital, in a year will be comparable to the third Google, notes VTimes, but will be an order of magnitude inferior to such a well-monetized business messenger as Slack. In terms of daily audience metrics, Telegram will be closer to Twitter and 2.5 times behind Google and Facebook.

VTB Capital’s calculations are based on an estimate of Telegram’s monthly audience at 500 million people (the messenger recently exceeded this threshold) and 430 billion views of publications, which will be a good basis for an advertising business model and other methods of monetization. The investment bank estimates Telegram’s revenue at the end of 2022 at $200 million.

According to VTimes, Telegram has been accepting applications since March 8, and the collection ends on March 10. The offering will be completely over-the-counter, so the company will be able to disclose less information about itself.

VTB Capital later emphasized that the figures given, with a spread of tens of times, are not estimates, but model calculations. “Any investor understands that such a wide range of estimates cannot be considered as a business assessment and is not applicable from a practical point of view for valuing a company, which is not necessary in the context of a debt instrument,” a representative of the investment bank told RBC.

A lot or a little?

VTB Capital calls Telegram bonds “an interesting instrument for investors with an increased risk appetite”, taking into account the yield target of 7% per annum. The maturity period is 5 years, the planned placement volume is more than $1 billion.

7% in dollars is a high yield, given that Ozon placed convertible five-year bonds worth $750 million at 1.875% on Nasdaq in February. True, Telegram is still unprofitable , so investors are required to assume a high risk, Evgeniy Pundrovsky, deputy director of the investment department at UFG Wealth Management, told VTimes. However, the messenger will easily recoup the costs with expenses of about $1 per user per year, the expert notes, and with an audience of more than 1 billion users, which can realistically be reached in two years, it should not cost less than $100–150 billion.

One of the participants in the placement did not agree with VTB Capital’s assessment of Telegram and said that he was targeting $50–100 billion. According to The Bell, at the end of 2020, the founder of the messenger, Pavel Durov, refused the investment proposal based on the company’s valuation of $30 billion.

Find out more

Perhaps Durov would not have had to think about monetizing Telegram and expensive debt financing if the project to launch a cryptocurrency on the TON blockchain had not failed last year. Two and a half years ago, he raised $1.7 billion from investors for a project of an independent currency and a decentralized Internet. The Bell told the story of Gram and TON from idea to failure here .