Twitter, the popular micro-blogging site and social media upstart, raised $200 million in private equity funding this week, raising its total valuation to $3.7 billion.
The San Francisco, Calif.-based company got the funding from Kleiner Perkins Caufield & Byers, a Silicon Valley venture capital firm. Twitter did not initially confirm the $200 million when it announced the funding in a blog, the company later did so when it spoke to various media sources. Kleiner Perkins in the past has funded firms such as AOL, Amazon.com, Google and Symantec.
The company also added two new board members, Mike McCue and David Rosenblatt. McCue is the CEO of Flipboard, an iPad app development company. Rosenblatt is the CEO of DoubleClick, a digital marketing firm.
Twitter said in the blog post that over the past year it registered 100 million new accounts. Its employee base, the company said, has grown from 130 people to more than 350. The company was founded in 2007 and since then has grown at an impressive rate, with 25 billions tweets having been sent over the past year.
Twitter declined to comment on the subject beyond the initial blog post.
A spokesperson for Kleiner Perkins said in an emailed statement, We are privileged and excited to be the lead investor in Twitter's latest investment round. As part of the Twitter team, we look forward to helping build the next great Internet treasure.
One analyst, Sandeep Aggarwal of Caris & Company, said the $3.7 billion valuation of Twitter seems accurate.
It is one of the five largest private internet companies out there right now. The largest is Facebook, which has been valued at $40 billion. Obviously, Facebook has a much bigger footprint, 100 million more users, so from that perspective, slightly under $4 billion doesn't surprise us, Aggarwal said.
He said Twitter needs to focus on monetizing their large user base, whether that's through advertising or some other method. He said if the company can successfully do that, it might be a candidate for an initial public offering (IPO) in late 2011.
If they can scale up the annual revenue, they would be welcomed as an IPO candidate, Aggarwal said.