TWITTER CLOSED a new round of funding yesterday with five investors including mutual fund giant T Rowe Price and private equity firm Insight Venture Partners, underscoring growing investor interest in the three-year-old internet microblogging service.
Twitter did not disclose the amount raised in yesterday’s round, or the valuation that it indicated, describing it only as a “significant round of funding” on the company’s official web blog.
On Thursday, media reports said Twitter was raising $100 million (€68 million) in a round of funding that pegged its valuation at $1 billion.
Twitter, which lets people send short, 140-character text messages to groups of “followers”, is one of the fastest-growing internet social media companies. Worldwide visitors to its site hit 44.5 million in June, up 15-fold from a year earlier, according to comScore.
But Twitter has yet to figure out how to make money from the free service. Executives have cited premium features and advertising as key initiatives to make money, though co-founder Biz Stone said this week that Twitter would not take advertising this year, despite widespread speculation that it would.
“It is important to us that we find investment partners who share our vision for building a company of enduring value,” wrote Twitter chief executive Evan Williams on the blog, noting Twitter closed the round “a few hours ago”.
The participation of T Rowe Price, a mutual fund known more for investments in public companies than in start-ups, stirred speculation that Twitter could be moving toward an eventual public offering or acquisition.
Some analysts believe Twitter could eventually be acquired by one of the established internet companies such as Google, Yahoo or Time Warner’s AOL. Earlier this year, Google chief executive Eric Schmidt called Twitter a “poor man’s e-mail”.
San Francisco-based Twitter said the latest funding round included T Rowe Price and Insight Venture Partners, as well as existing backers Institutional Venture Partners, Spark Capital and Benchmark Capital.
The company has said in the past that it intends to remain independent. Past investors included Benchmark Capital, Union Square Ventures, Charles River Ventures and Bezos Expeditions, which manages Amazon.com chief Jeff Bezos’s personal investments, according to ThomsonReuters data.
A February round of funding, led by Institutional Venture Partners and Benchmark Capital, had valued Twitter at about $250 million. The pair jointly invested $35 million in Twitter during that round. “This round shows that Twitter is committed to build the company into something special,” Spark Capital general partner Todd Dagres said. – (Reuters)
