Twitter‘s new round fundraising on which Wall Street Journal made a news and TechCrunch has been sharing what they have heard have begun to take shape. It was said that Twitter was going to get $50 million fundraising according to the earlier news, although as we have heard Twitter’s new round amount will be $100 million with a valuation of $1 billion.
It is expected that seven investors will participate to the fundraising, which is predicted to be at the level of $100 million. The investor group currently includes T. Rowe Price, Insight Venture Partners, Spark Capital and Institutional Venture Partners. Also, as an additional information, Twitter raised $35 million in February Serial C when they valued the company at $250 million.
Spark Capital and Institutional Venture Partners were already in the group of Twitter investors. We already knew well of T. Rowe Price, which invested at Slide, initiative of Max Levchin, the founder of PayPal, at the level of $50 million, and Insight Venture Partners, with its DivX investment at the level of $17 million.
I guess that Twitter will gain a strong structure financially with $100 million fund, while we will soon feel the effects of the synergy it will catch with the leading investors behind it.
We will wait and see which model Twitter will apply in the coming period in excitement as it does not have an earnings model yet and probably has not made $1 turnover. It is naturally an issue of concern not only for us, but for everyone whether Twitter, which has proved that it is one of the important payers in the sector with its $1 billion valuation, will succeed as Google did with its ad earnings, which no one predicted.
Twitter, which started to support its SMS based features again, will probably make use of this option for building its earnings model. Also, “Verified Accounts”, which it launched on trial to give exclusive services to persons and companies, might be considered another potential earnings model.
In addition to all of the above, it might as well build ad options in the website and apply its ad fields that are currently on the right column but have not been commercialized yet. Beyond all of our fictions, the reality is that, Twitter is expected to have 25 million members until the end of 2009 according to WSJ, and it will be well qualified for the $1-billion valuation with its ad and premium membership options.
I am not sure if it is important to generate income for Twitter, which has become one of the most important tools of social media. However, Twitter will be the main source of real time search technologies. Also, in 2010, with a Microsoft acquisition, which will probably have to support Google or Bing, it might have a return that will be above its valuation and satisfy its investors as well.