Said to be about to raise $100 million in fundingTwitter is one of the hottest web properties of the moment, generating a lot of interest from the media and celebrities with a huge number of new users following their lead. But despite the hype, the company is yet to make any revenue, not that it seemed too troubled by that. And if you thought Twitter was taking it slow before, with $100 million apparently headed its way, it can take all the time in the world to develop a business model or even wait to sell or go public.
Rumors of a new funding round popped up last week when there was word of a $50 million investment but the Wall Street Journal has now provided more details. A total of seven investors are said to be looking to open their wallets to provide the microblogging site with around $100 million in funding. The new round will valuate the company at a whopping $1 billion, putting it out there with the big boys. Of the group only two are new investors in Twitter, T. Rowe Price and Insight Venture Partners, and previous investors also making contributions in this latest round include Spark Capital and Institutional Venture Partners.
Twitter has so far raised $55 million in three funding rounds, half of what's about to pour in its coffers now, and the company has only managed to spend $25 million of those. The latest round came in February this year when the company raised $35 million. At the time, Twitter was valuated at $250 million but the huge growth in popularity and user numbers that followed have more than quadrupled its worth in a little over half a year.
The $1 billion valuation is said to be in direct relation to that of Facebook's accounting for the smaller user base. Facebook has been valuated at $15 billion at some point though a recent investment put it at $10 billion and later some sales of common stock were made at the much smaller $6.5 billion valuation. Facebook has more than 300 million users today, roughly 10 times more than Twitter, though an exact estimate for the microblogging site is hard to come by as many users connect with third-party desktop and mobile clients.