Twitter’s usage has been soaring into the stratosphere of late; now its finances are receiving a similar boost.
The microblogging service announced on Friday it had closed a funding round led by A-list VC firms Benchmark Capital and Institutional Venture Partners.
The figure is $35m, but there is no official word on what valuation that gives the company.
Techcrunch reported last month that Twitter was working on a round with IVP that would give it a $250m valuation – half of the takeover figure proposed by Facebook last year.
Biz Stone, co-founder, said on the Twitter blog that Benchmark partner Peter Fenton would join its board and Twitter’s small team of 29 people would grow much bigger.
Twitter’s active users were growing at a phenomenal rate, he said, increasing 900 per cent in a year and this strong growth had attracted VC interest.
The new round, following on from investments by Spark Capital and Amazon’s Jeff Bezos last June, indicates that the Twitter founders have the confidence in the business’s potential to go it alone rather than cash out.
“We are now positioned extremely well to support the accelerating growth of our service, further enable the robust ecosystem sprouting up around Twitter, and yes, to begin building revenue-generating products,” said Mr Stone.
That last point, given the service’s embarrassing lack of a business model, will be a comfort to Twitter’s backers, past and present.
UPDATE: Peter Fenton just explained some of Benchmark’s thinking to us:
We are investing 35MM with IVP, and I will be going on the board. They were not looking for money, but given their explosive growth (900percent last year), they decided to partner with an active west coast syndicate to vigorously pursue the path of independence. Why did we invest? We absolutely love the team, Ev, Biz, Jack, and have been tracking them since 2007. As a business opportunity, it jumped out to us as having many potential revenue streams that support, and don’t undermine, its success. If we had to describe it, we see it as a 1 to many network for rapid exchange of information, and think that network supports a variety of
compelling business models.
