Mubadala and Abu Dhabi Catalyst Partners invest $150m in Telegram app

The social messaging app has become increasingly popular following WhatsApp's user policy change and has more than 500 million active users

FILE PHOTO: Men pose with smartphones in front of a screen showing the Telegram logo in this picture illustration November 18, 2015. REUTERS/Dado Ruvic/File Photo
Beta V.1.0 - Powered by automated translation

Social messaging app Telegram is receiving $150 million in new funding from Abu Dhabi-based investors.

Mubadala Investment Company said yesterday that it is buying five-year, pre-initial public offering convertible bonds worth $75 million in the company. Abu Dhabi Catalyst Partners – a joint venture between Mubadala and New York’s Falcon Edge Capital – is also investing $75m.

“We believe that Telegram is well-positioned for an inflection point that will transform it into a leading global technology company,” said Faris Al Mazrui, head of Mubadala’s investment programme for Russia and the Commonwealth of Independent States.

“The company represents a very promising investment opportunity for Mubadala and will sit well within our wider portfolio of pioneering companies looking to transform their respective industries.”

Telegram co-founder Pavel Durov said the platform was looking forward to developing the strategic partnership with Mubadala and Abu Dubai Catalyst Partners “to continue our growth in the Mena region and globally”.

The platform was founded in 2013 by Mr Durov and his brother Nikolai as a secure messaging app with end-to-end encryption. It was initially based in Russia but later moved its headquarters to Dubai.

Last month, Mr Durov praised the start-up ecosystem and the business-friendly legislation in the UAE at a meeting with Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed.

Telegram’s user numbers have increased in recent months after Facebook-owned WhatsApp made changes to its terms and conditions, sparking privacy concerns. It is now one of the 10 most downloaded apps in the world with more than 500 million active monthly users.

The growth “demonstrates the management team’s unshakeable dedication to building a platform centred around privacy and user experience”, said Abu Dhabi Catalyst Partners’ chief financial officer James Munce.

Telegram will also open an office in Abu Dhabi Global Market, the UAE capital’s financial free zone.