Telegram Group Inc. has canceled its initial coin offering after the popular messaging app raised a record-setting $1.7 billion from a group of less than 200 private investors, the Wall Street Journal reports.
Telegram sold its Gram virtual coins in two private funding rounds with proceeds going to create a decentralized network for the app. The second round of fundraising has collected $850 million from 94 accredited investors, who were required to pump a minimum of $1 million, according to a Securities and Exchange Commission filing.
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That has doubled the investment funds raised by the first presale offering, which has closed a similar $850 million financing round from 81 investors, the BVI-based firm disclosed in February.
The fundraising was not planned to stop there as the five-year-old company, which claims over 170 million users, was reportedly pursuing one or more subsequent rounds beyond these first two sales. According to previous estimates, the encrypted messaging service anticipates receiving $2.55 billion in three rounds of funding.
Telegram founder Pavel Durov is planning to use the ICO proceeds to build a blockchain network, dubbed “Telegram Open Network (TON),” which allows the app users to pay for services using the cryptocurrency Gram. The Russian entrepreneur said he won’t give up control of Telegram to other investors as the ICO structure lets him raise funds while keeping control.