Reuters top ten news stories delivered to your inbox each day.
You are here:
Business & Finance
The Great Debate
Do More With Reuters
Make Reuters My Homepage
Support (Customer Zone)
About Thomson Reuters
Twitter gets new round of funding, new backers
Fri Sep 25, 2009 8:49pm EDT
Email | Print |
| Reprints | Single Page
By Alexei Oreskovic
SAN FRANCISCO (Reuters) - Twitter received $100 million in funding on Friday, valuing the company at $1 billion, according to a person familiar with the matter, as investors bet that the Web company's explosive growth will yield actual revenue or a lucrative deal.
Investors including mutual fund giant T. Rowe Price and private equity firm Insight Venture Partners took part in the latest round of funding which closed on Friday, according to Twitter. Twitter did not give the amount of the funding.
Analysts and industry executives say the involvement of T. Rowe Price and Insight set the stage for an eventual IPO or acquisition, and illustrated how private equity and investment fund houses were increasingly getting into tech startups.
But the three-year-old Internet microblogging company 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 told Reuters this week that Twitter would not take advertising this year, despite widespread speculation that it would.
While the heady valuation for a company without revenue may, for some, recall the unbridled exuberance that defined the dotcom bubble of the late 1990s, others argued that Twitter was a special case.
"I wouldn't take this as a sign that the entire market has become frothy now and that every entrepreneur can get funding," said Raj Kapoor, a managing director at the Mayfield Fund.
Most startups raising capital still need to prove that they have real revenue opportunities, Kapoor said.
"If Twitter gets a pass, it's because it has "pierced the mass market," he said. "It's become a verb."
Twitter, which lets people send, or tweet, 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.
IT'S A VERB
Twitter announced it had closed a "significant" round of funding on the company's official blog on Friday, with existing backers Institutional Venture Partners, Spark Capital and Benchmark Capital also participating.
A person familiar with the matter, speaking anonymously because the deal terms were not public, said the investors contributed $100 million in new funding, granting the company a $1 billion valuation. The amount of financing and the investors was reported by the Wall Street Journal on Thursday.
A February round of funding in Twitter, led by Institutional Venture Partners and Benchmark Capital, had valued Twitter at just about $250 million. The pair jointly invested $35 million in Twitter during that round.
Some analysts believe Twitter could eventually be acquired by one of the established Internet companies such as Google Inc, Yahoo Inc or Time Warner Inc's AOL. Google CEO Eric Schmidt called Twitter a "poor man's email." Continued...
View article on single page
AT&T looks to flip net rules debate on Google
Also On Reuters
Analysis: Obama scores twin coups on Iran, economy
Analysis: Danger zones for business travelers
Blog: Iran’s nuclear plant and the definition of covert
More Technology News
AT&T looks to flip net rules debate on Google
Vanguard readies iPhone app as fund firms go mobile
RIM seen facing increased market-share pressure
EU seeks to ensure Microsoft ballot offers choices
Rossellini ponders how to make online video pay
More Technology News...
Twitter snags $100 million investment, new backers
Friday, 25 Sep 2009 05:46pm EDT
UPDATE 3-Twitter snags $100 mln investment, new backers
Friday, 25 Sep 2009 05:45pm EDT
A selection of our best photos from the past 24 hours. Slideshow
Most Popular on Reuters
Protesters, police clash after G20 in Pittsburgh
TOPWRAP 10-Upbeat G20 takes new lead role on global economy
Stanford in hospital after jail altercation
Man sues BofA for "1,784 billion, trillion dollars" | Video
Man sues BofA for "1,784 billion, trillion dollars"
RPT-Man sues BofA for '1,784 billion, trillion dollars'
Obama scores twin coups on Iran, economy
G20 upbeat on economy, pledges financial reforms | Video
Five killed in suspected suicide attack in Pakistan
How firms can respond to the Asian militant threat
Most Popular Articles RSS Feed
Obama hails progress at G20
Obama: Iran is "on notice"
Cyborg beetle flies by wireless
Bomb plot suspect flown to NY
U.S. southeast pounded by floods
Record 8.7kg baby born in Indonesia
Showbiz Week: Deja vu at Emmys
UN: Pace of climate change quickens
Thousands protest at G20
Hollywood power women honored
Most Popular Videos RSS Feed
Google CEO says deals "on again"
Google Chief Executive Eric Schmidt said acquisitions are "turned on again" at the Internet company and expects to do one small deal a month instead of hiring new staff. Full Article
Help and Contact Us |
Advertise With Us |
Journalism Handbook |
Site Index |
Thomson Reuters Corporate:
Professional Products |
Professional Products Support |
About Thomson Reuters |
Latin America |
United Kingdom |
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.