No IPO Soon: Twitter Raises Another $200 million
Dec 15th 2010 10:25PM
Updated Dec 15th 2010 10:27PM
SAN FRANCISCO - Don't expect Twitter to be tweeting about an initial public offering any time soon. The popular online communications service has raised another $200 million so it can keep growing without Wall Street's help.
Kleiner Perkins Caufield & Byers, one of Silicon Valley's best-known venture capital firms, is leading the investment announced Wednesday. Twitter also added two successful entrepreneurs, Mike McCue and David Rosenblatt, to its board of directors.
The funding was first reported by the technology blog, All Things Digital.
Twitter's association with Kleiner Perkins is likely to add to the intrigue about the moneymaking potential of a service that each day blasts out more than 65 million short messages, or "tweets," limited to 140 characters.
Kleiner Perkins' past Internet bets include investments in online search leader Google Inc., now worth about $190 billion, and leading Web merchant Amazon.com Inc., now worth about $80 billion.
The venture capital firm obviously thinks highly of Twitter, which started in 2007. The $200 million investment values Twitter at $3.7 billion, up from $1 billion 15 months ago when the company last raised money from ventures capitalist. Some of Twitter's previous financial backers upped their ante by joining Kleiner Perkins in the latest round.
Twitter has now raised about $360 million since its 2007 inception.
With so much cash being supplied by investors, Twitter's management has been able to focus on hiring more workers and adding more features instead of worrying about how to make money. The company, based in San Francisco, now employs about 350 people, more than tripling its payroll since the beginning of the year.
Most of Twitter's revenue so far has flowed from deals that have given Google, Microsoft Corp.'s Bing and other Internet services better access to its messaging stream. Over the past eight months, Twitter has gradually allowed ads to appear amid its service's chatter.
Twitter hasn't set a timetable for pursuing an IPO that would allow its current backers to cash out of their investments and give others a chance to buy the company's stock. Its executives, though, have repeatedly said they're in no hurry to take the company public.
Selling to a larger company remains a possibility, too.
The newest directors on Twitter's nine-member board both have experience with the sell option.
McCue sold TellMe, a company specializing in voice recognition software, to Microsoft for $800 million in 2007. He is now running another Kleiner Perkins-backed startup, Flipboard, which transforms links posted on Twitter and Facebook into a magazine format for the iPad. Apple Inc., the maker of the computer tablet, recently anointed Flipboard as its top iPad app of the year.
Rosenblatt was CEO of the online ad service DoubleClick Inc. when it was sold to Google for $3.2 billion in 2008. Twitter's current CEO, Dick Costolo, and previous CEO, co-founder Evan Williams, also previously sold startups to Google.
In a Wednesday tweet, Costolo said the new funding will "help grow Twitter to infinity and beyond."
Copyright 2010 The Associated Press.