According to the Wall Street Journal, Twitter is about to close a $100 million funding round from as many as seven investors, including T. Rowe Price, Insight Venture Partners, Spark Capital, and Institutional Venture Partners. Even though Twitter has yet to actually make money, these investors are valuing Twitter at about $1 billion. The Wall Street Journal, which is relying on information from an anonymous person “close to the deal,” states that the deal could close today and would be Twitter’s third and largest round of VC funding to date.
Rumors about this new round started to appear about one week ago, though at the time, the actual amount was rumored to be around $50 million. Around the same time, we already wondered a bit about Twitter’s $1 billion valuation, which seems somewhat disproportionate to Twitter’s current revenue stream. While companies around Twitter are using the ecosystem that Twitter has created to make money, Twitter itself still hasn’t announced how it plans to make money.
This kind of valuation is going to give Twitter a long runway before it actually has to make money, but at the same time, it also makes it unlikely that anybody is going to acquire Twitter in the near future.
We will obviously keep an eye on this developing story and will update it once we get more information.
Image used courtesy of Flickr user tao zhyn
