Twitter on Wednesday raised another $200 million in financing from a local Silicon Valley venture capitalist firm, increasing the thriving micro-blogging startup's valuation to an astounding $3.7 billion.
The new round of financing was led by Kleiner Perkins Caufield & Byers, one of California's most prominent technology-related investment firms. Some of Twitter's initial investors also chipped in on the company's second round of funding in the last 15 months. The social networking site has now raised $360 million since it opened its doors in 2007. The funding was first reported by All Things Digital and later confirmed by a company spokesperson.
With fresh capital in hand, Twitter's management team said that they plan on continuing to expand the company's workforce at a near frantic pace. In the last year alone, Twitter's staff has grown from 130 people to more than 350. During that time, the site attracted over 100 million new registered users.
Twitter's recently-named CEO Dick Costolo, who took over for co-founder Evan Williams in October, noted in a blog post that the influx of cash has helped the company recruit two new members to their board of directors. Joining six other entrepreneurs on the board will be Mike McCue, CEO of social magazine Flipboard, and David Rosenblatt, former chief executive at DoubleClick, an online advertising service that was sold to Google for $3.2 billion in 2008.
The micro-blogging company's valuation has risen from around $1 billion to $3.7 billion in just over a year.
"It's a huge multiple, but the idea is that (Twitter's) scale can be monetized," BGC Partners analyst Colin Gillis told Reuters, adding that the company's annual revenue has increased to about $100 million since it began its advertising push earlier this year.
While the new round of funding will certainly allow Twitter to increase its quantity of new hires, it may also dilute the quality of potential employees. As Business Insider notes, Twitter's skyrocketing valuation will make it more difficult to entice highly sought after talent with stock. Furthermore, the funding is said to be a DST-style deal, which means that some of the company's initial employees can cash out some of their stock and move on to another startup.
Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.Edited by Erin Monda
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