According to Michael Arrington over at TechCrunch, the juggernaut social networking phenomenon, Twitter just signed a term sheet with IVP for $250 million. This comes on the heels of rumors back in November that Facebook had offered Twitter up to $500 million in Facebook stock.
Here is the article…
Twitter Raising New Cash At $250 Million Valuation
by Michael Arrington
January 24, 2009Twitter, which just recently turned down a half billion dollar acquisition offer from Facebook (albeit to be paid mostly with Facebook stock), is dipping back into the venture capital market, we’ve heard from a source with knowledge of the deal. They’ve signed a term sheet with at least one venture fund to raise a new round at a $250 million valuation. We are still gathering information on how much they’re raising and from whom.
It’s likely they’ll raise more than the $20 million in capital they’ve taken in over two previous rounds. Their last round, raised in June 2008, was a $15 million raise from new investors Spark Capital and Bezos Expeditions. Union Square Ventures and Digital Garage increased their previous investment.
Rumor is Twitter hit up more than a few venture firms to pitch the $250 million valuation, and got more than one “no.” But someone’s bit, perhaps encouraged by Twitter’s breakneck growth and the interest from Facebook. That means Twitter gets a new cash injection and time to figure out its business model at an even more leisurely pace.
Update: We’ve heard from two sources the venture firm that signed the term sheet is IVP.
Why is this relevant?
Twitter is quickly transforming new media and communication. It recently passed Digg in registered users. In recent months we also saw the first political campaign use Twitter to generate fundraising for California Assemblyman Chuck DeVore in his bid against California incumbent Senator, Barbara Boxer. Moving forward, look for Twitter to be completely integrated into any media and communications plan implemented by businesses, community organizations, and political campaigns. A word of caution… while the promise of increased connectivity is very real, Twitter still needs to demostrate it has a viable business model to survive long term.
January 26th, 2009 at 2:45 am
I discovered your homepage by coincidence.
Very interesting posts and well written.
I will put your site on my blogroll.
:-)