TechCrunch has quoted from an undisclosed source that Twitter is currently pressing for funds at a $1 Billion valuation.
It is also said that the micro-blogging giant plans to raise about $50 million in the coming financial round, adding up to approximately $55 million to date.
Many would be raising their eyebrows upon reading its ambitious valuation. It was just in February that Twitter was valued at $250 million, raising $35 million in a Series C round of funding .
A sudden increment to a milestone billion dollar valuation is indeed hard for many to grasp.
Nonetheless, we are pretty sure Founder and CEO Evan Williams would not put so much value into the company without convincing reasons.
Here’s what we think:
1. Twitter’s explosive growth
Facebook has been phenomenal. It has recently announced its 300 million users milestone and is supported by a reasonably good business model. Although both are rivals, Twitter’s explosive growth in many ways resembles Facebook’s success beginning. It seems possible for Twitter to be the next big thing. What do you think?
2. It is the micro-blogging monopoly
Plurk, PhotoBooth and recently, Yahoo Meme are all Twitter-like services that are primarily competing against Twitter. But so far, none of them have managed to ruffle Twitter’s bird feathers. If Twitter were to remain as the top micro-blogging choice, opportunities for financial gains would definitely be aplenty.
3. It has many business users
We have seen 80% of users using Twitter as a marketing tool. And recently, a study shows that 20% of our tweets contain a brand name. In other words, people on Twitter are embracing corporate messages. With increasing number of businesses going on Twitter, along with its upcoming business statistic tool, it could very well prove itself with a lucrative business model.
It is not confirmed
With all that said, it is merely just speculation and guesswork. Twitter has yet to confirm TechCrunch’s source, so take everything with a pinch of salt. Nevertheless, these are still valid pointers that investors would use to evaluate the possible $1 billion valuation.
