Fin24

Twitter lands record finance deal

2011-08-02 07:29

San Francisco - Twitter has something big to tweet about. The microblogging site said it has secured a "significant" investment reportedly at a record level of $800m, which would value the company at $8bn.

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 into the social-networking company Facebook two years ago at a valuation of $10bn.

Digital Sky Technologies invested $400m for a 5% stake in Twitter with a separate group of investors led by the US financial services companies T Rowe Price Group and JPMorgan Chase 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.

* Naspers [JSE:NPN] owns a stake in Digital Sky Technologies.  Fin24 is a Naspers publication.