Blog Post

Twitter Closing its $15 Million Round With Spark; Bit Less Than $100M Valuation

As has been reported and rumored for the last month or so, the much-hyped mobile messaging and community service Twitter is in the process of closing its $15 million round, and the investor is Spark Capital, we have confirmed through sources. Previous investor Union Square Ventures is also re-upping in this round, our sources say. Spark is the digital media-focused investment firm based in Boston, and has invested in companies such as Veoh, Kickapps, NextNewNetworks and others. In total, the company will have raised about $20 million after this round closes.

As we pointed out last week, the new round comes amidst a particularly bad stretch at the company, which has been suffering blackouts on a daily basis as of late. And of course, the business model part of it is still, well, a bit in the future, and more than anything, this new round is about buying the company time to figure out that part.

Dennis Miller, the General Partner at Spark Capital, is speaking next week at our EconAds seminar and will talk about online advertising deals…

5 Responses to “Twitter Closing its $15 Million Round With Spark; Bit Less Than $100M Valuation”

  1. Twitter occupies the same space once dominated by CB radio…and runs the same risks. Once people start suffering frequent service gaps, they're likely to find alternatives such as Friendfeed, and move on.

    There is an opportunity for livestreaming bits of information; however $15 million only goes so far in working with consumers and maintaining their loyalty as other options present themselves. As I see it, there are several more-or-less inevitable spikes ahead that will severely tax their system:

    (1) Major US weather disaster
    (2) Major news event after widespread mainstream adoption
    (3) Broad adoption by fantasy sports enthusiasts

    I don't count things like the elections, Olympics or the holiday season in this because those things are predictable. The events that are likely to bring Twitter to a crawl are the things that are unpredictable and generate huge spikes. I mention fantasy sports because it's one of those things that causes headaches for giants like CBS and ESPN…and has yet to intersect the Twitterverse.

    As I mentioned in my blog – when CB radio faded, it was replaced by a successor that we know very well today:

  2. With all this investment, when are they going to start earning, theya re making the task more and more difficult as they keep taking on more finance.

    The valuation must be at least $100 million, that leaves a lot of income expectations.