Twitter, the fashionable microblogging service, is set to close a round of financing of around $100 million that values the three-and-a-half-year-old start-up at $1 billion, according to a person briefed on the company’s plans.
The investors include Insight Venture Partners, a New York venture capital firm, T. Rowe Price, the mutual fund company, and the current Twitter backers Spark Capital and Institutional Venture Partners.
Twitter does not necessarily need the capital. It previously raised $55 million and says it has only spent $25 million of that cash. But the company has big plans to expand the service from its roughly 50 million current users and to ultimately catch up to Facebook — which recently reached 300 million members. Both of these companies believe they can one day reach a billion users around the world — nearly the entire current population of the Internet. The extra cash, this person said, will help the company keep up with demand and build out the service.
As for how Twitter managed to raise money and score an impressive valuation without ever actually bringing in any significant revenue on its own, that apparently was never a problem. Investors have been competing furiously to inject cash into the promising start-up, the person briefed on its plans said.
Twitter’s last round of financing, raised in February, valued the firm at $250 million, meaning Twitter has quadrupled in value in less than a year.
The news of the new valuation was first reported last week by the blog TechCrunch. This morning, details about some of the new investors and the timing were added by the Web site of The Wall Street Journal.
Comments are no longer being accepted.