Twitter now has the war chest it needs to try building its microblogging service from a geek tool to a mainstream utility. The company has raised $35 million in new financing. The round valued Twitter at slightly more than $250 million, according to a source familiar with the situation.
Twitter co-founder Biz Stone announced the funding on the company’s blog. “With … this new funding, we are in a position to move more confidently toward our vision for a robust and successful Twitter, Inc.,” Stone says.
Twitter’s active users have grown 900% in a year, Stone says. It’s also attracted a slew of mainstream attention since last year’s presidential election heated up. Companies are flocking to build Twitter into their Web sites. A cottage industry of startups are building entire businesses on top of Twitter, ranging from desktop apps like TweetDeck to Web sites like StockTwits. And recent press includes a nice writeup in New York magazine.
But Twitter has famously made no (or very little) revenue from any of this. Its expenses include servers, 29 employees, and text messaging charges. The company promises it’s focusing on growth now, and will worry about revenue this year. Recently, the company announced that it’s hired its first business development executive.
New investors include Benchmark and Institutional Venture Partners; previous investors Spark Capital and Union Square Ventures also contributed. Benchmark’s Peter Fenton is joining Twitter’s board.
“We weren’t actively seeking more funding because significant capital from last year’s partnership with Bijan and his team at Spark is still in the bank,” Stone says. “Nevertheless, our strong growth attracted interest and we decided to accept a unique opportunity to make Twitter even stronger with a very attractive offer.”
An IVP rep tells us the round was $35 million, but declined to offer the valuation.