Confirmed: Twitter Raises New Round Of Funding


Twitter just confirmed on its corporate blog that it raised a third round of funding from new backers Insight Venture Partners and T. Rowe Price, along with existing investors Institutional Venture Partners, Spark Capital and Benchmark Capital. Founder Evan Williams calls the round “significant” but does not detail how much the company got. Several reports have put the round at $100 million. The big question: What the startup will do with the new cash.

Twitter had already raised $55 million in two rounds — and reportedly still had $30 million in cash left. Williams does not elaborate on what the company will do with the new funds, although he says it is “important to us that we find investment partners who share our vision for building a company of enduring value.”

In other words, maybe we’ll finally see some plans the company has harped but not delivered on now come to fruition. Among them: An enhanced search engine that indexes both Tweets and also the pages that the Tweets link to; the introduction of premium accounts; and some e-commerce integration. And maybe — just maybe — we’ll see an end to the site’s massive outages. Twitter certainly won’t have any excuses.



Kudos to Twitter, but I don't understand how a company with no *certain* revenue plans can raise so much money. We keep saying we've learned from the past (ie; and other cyber-tanking machines…and we're not just talking 1998, but think about it), yet then we read stories about companies who get multi-million dollar cash injections from VC's. Maybe I'm missing something…
It's true that the Twitter audience has grown so numbers are on their side, however I think premium accounts may kill some of the users. It will just feel less organic and something newer and sexier will pop up.


For Twitter (and Twitter's investors), this makes a lot of sense if one assumes that they roll up the choicest portions of the third-party twitter ecosystem into their core (through M&A), refine their API approach to this newly aggregated/federated platform and then cultivate a deeper, richer ecosystem around same.

Then, when the tree needs a good "pruning" again, start the M&A process anew.

For more fodder on this one, check out:

Twitter Financing: Pruning the Garden with $100M Shears


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