Twitter secures major financial boost

2011-08-02 10:16
San Francisco - Twitter Inc has something big to tweet about. The microblogging site said it has secured a "significant" investment reportedly at a record level of $800m (R5.37bn), which would value the company at $8bn (R53.7bn).

Twitter did not confirm the level of funding on Monday but said the financing had been led by Digital Sky Technologies, a Russian investment firm that injected $400m (R2.7bn) into the social-networking company Facebook Inc two years ago at a valuation of $10bn (R67bn).

Digital Sky Technologies invested $400m for a five percent stake in Twitter with a separate group of investors led by the US financial services companies T Rowe Price Group Inc and JPMorgan Chase and Co adding another $400m, the Financial Times reported, citing an unnamed source familiar with the deal.

Half of the money would be used to buy back shares from existing employees while the other half would be used to issue new shares, the newspaper said.

The investment was believed to be the largest venture finance injection in history, the San Jose Mercury News reported. The paper quoted the National Venture Capital Association as saying that no company had ever received $400m in a single financing round, much less $800m.

Twitter said it would use the money "to aggressively innovate, hire more great people and invest in international expansion".

It noted that in the past year, its employee count had grown to 600 and it had more than tripled the number of tweets transmitted each day to more than 200 million.

- SAPA
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