Rumors earlier this week of Twitter negotiating a new round of funding at a valuation of $1 billion are confirmed today by co-founder Evan Williams on the Twitter Blog. TechCrunch reports this latest round of funding has closed with Twitter receiving $100 million.
Twitter’s previous round of funding raised $35 million in February of 2009 at a valuation of $250 million. The new figure of $1 billion quadruples Twitter’s valuation in just 7 months.
Keeping in the spirit that you have to spend money to make money, Twitter has yet to produce a viable revenue stream. We anticipate that this $100 million injection is contingent on Twitter rolling out a paid advertising platform in the very near future. It’s worth noting that Facebook received $716 million in funding before finally announcing, less than two weeks ago, the company is now cash flow positive.
Evan William thanks Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, and Morgan Stanley as contributing investment firms. Twitter to date has received $155 million in venture funding.
New research shows that Twitter is gaining recognition as a useful business resource among younger demographics. A survey conducted by AIIM shows that 27% of 18-30 year olds see the value in Twitter as a crowdsourcing and feedback tool, compared to just 7% of participants over the age of 45. Twitter has become popular for young professionals as a way to find answers from experts, poll their followers, share opinions, and communicate during conferences and while traveling.
Business users tend to be more engaged on Twitter than personal users. Of those surveyed, half of business users actively post and contribute to conversations rather than just following.
“We’ve been tracking the rapid growth of Enterprise 2.0 – the business use of social media – for a couple of years,” says Atle Skjekkeland, VP of AIIM, “but Twitter has grown much faster than anything we’ve seen before. It seems to me that Twitter brings back such quick answers from any expert community that it cannot fail to have a lasting place within the general business toolbox.”
Of the 788 respondents to the AIIM survey, 34% had a Twitter account.