Twitter May Raise Another $200 Million

dick costolo twitter ceoTwitter boss Dick Costolo

Photo: joi ito

Twitter is being bombarded by interested investors, Peter Kafka says, and the company is mulling raising another huge round of financing–perhaps $200 million.No decisions have been made, says Twitter.

Raising more cash would make sense. Twitter is red-hot and has a massive global opportunity. The time to raise money is when you can, not when you have to, and, right now, Twitter certainly can.

The company’s valuation for its last round of $100 million was $1 billion.  We don’t see Twitter selling more than 10% of the company in the next round, and we could easily imagine a valuation in the $2-$3 billion range, especially given that the investor would likely be buying preferred stock.

Another $200 million in the bank would allow Twitter to invest like crazy, regardless of how fast its revenue grows.  And given the size of the opportunity, investing like crazy makes sense.  So taking $200 million in exchange for less than 10% of the company seems smart.

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