If it’s any indication, the ambitious $1.2 billion Telegram ICO could be oversubscribed. Kleiner Perkins Caufield & Byers, Benchmark and Sequoia Capital have each committed $20 million the blockbuster deal, according to the FT citing people close to the token sale. Telegram, a privacy-focused encrypted messaging app, is wildly popular within the cryptocurrency community, and they could just be the blockbuster ICO of 2018, setting the standard and tone for the rest of the year.

For context, ICOs, which is the modern way for blockchain startups to raise funding and for some traditional companies to stay relevant, raised approximately $4 billion in all of 2017. The largest of those deals was data-storage startup Filecoin, which raised $257 million. Meanwhile, Canadian messaging app for teens, Kin, raised about $100 million in its ICO, and it excluded local investors from the deal amid unclear regulation.

Telegram is targeting $600 million in this private fundraising round, in which big investors are getting a discounted price to the crowdsale of the same size that’s planned for March, the FT reports.

While regulators have their eye on token sales, the market is largely unregulated, and there’s more than a hint of skepticism among policymakers and even blockchain pioneers about the potential and/or intentions of many newcomers to deliver on the promises they make.

Dubai-based Telegram, however, has what many other ICOs lack — 170 million users across billions of messages each day. (Telegram founder Pavel Durov reportedly splits his time between London and Dubai these days.) This user traction removes a great deal of the speculation and risk that is tied to many of the unproven business models that similarly seek to launch token sales.

Not that there isn’t any risk. Telegram plans to develop its own blockchain, dubbed TON, on which a marketplace of sorts where business owners and Telegram’s users will exist, all fueled by the TON token. That platform won’t see the light of day till 2019.

The Intersection of VC & ICOs

The blending of Silicon Valley’s venture capital with ICOs is a trend that is only becoming more pervasive, as VCs increasingly opt to chase blockchain opportunities rather than remaining on the sidelines. For instance, Sequoia and Kleiner Perkins — both reportedly Telegram backers — are of the dot-com era, when they both famously backed a winner, Google. One of the greatest signals of this shift is Google Ventures backing of cross-border payments startup Ripple.

Incidentally, US venture capital poured $84 billion into more than 8,000 deals in 2017, revisiting the dot-com levels of the year 2000, as per PitchBook data. 2018 is shaping up to be more of an overlap between traditional VC and ICOs, with venture capitalists such as Raleigh-based early-stage backer Full Tilt Capital targeting $25 million for a cryptocurrency fund.

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