Billions of tweets have been sent since its last injection of capital. But Twitter has just announced it is getting another $200 million in funding, which puts the micro-blogging service at a $3.7 billion valuation. Its total funding so far (including the latest round) is $360 million, reports All Things D, so this represents a significant new chunk of change.
Twitter has been mum on the specifics of the funding round, but CEO Dick Costolo did take to the company’s blog today to demonstrate why Twitter needs the investment. The service grew by more than 100 million accounts, and customers sent 25 billion tweets in the past year. That traffic has drowned its servers and caused endless fail whales. What’s more, the company has ballooned to 350 employees.
As part of this latest round of funding, Twitter has added two new members to its board, Mike McCue of Flipboard and David Rosenblatt of DoubleClick. Along with the recent addition of Peter Currie, the board increases its strong advertisement and IPO experience, Kara Swisher notes.
But the more money a company raises, the more pressure there is to show profitability. Twitter can’t ride the heels of funding rounds forever–nor be valued in the billions–if it can’t prove a steady revenue stream. While the company has heavily pushed Promoted Trends this year, it’s unclear whether that’ll be the last piece of the puzzle.
Leaked financial documents show Twitter projects revenues of $150 million in 2010 and $1.54 billion by 2013. Will Twitter reach these goals?
And another important question: since an estimated 3% of all Twitter
traffic is Justin Bieber-related tweets, how much of this $200 million is
going toward Bieber fan upkeep? Taking that percentage of the
investment–$6 million–seems a bit high, since not all the money will be going towards bandwidth (though a lot of it will). Still, for that kind of money, they
could probably get him to sit on the board–or pay his six million followers
a dollar each to stop clogging their servers with tweets.