Twitter Nabs $35 Million in New Funding

It Lacks a Revenue Model, but Investors Still Want In

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Twitter
Twitter
And you thought the days of raising money without a business model were over.

Twitter has landed a reported $35 million in additional venture funding, despite the fact it still lacks a business model. The funding values the company at $250 million, according to news reports.

The move appears to buck a trend as venture funds have famously tightened their purse strings and sent directives late last year to their portfolio companies, urging them to buckle down and make their numbers. It's no longer enough to generate eyeballs and worry about monetizing them later.

But earlier this week the micro-blogging service shrugged off speculation, based on a British news report, that it would start charging corporate clients. It would not, it said, start charging anyone for services that are currently free.

In fact, Twitter said it didn't need the cash infusion -- but the additional money was too good to pass up. "Our strong growth attracted interest and we decided to accept a unique opportunity to make Twitter even stronger with a very attractive offer," the company said on its blog.

It said its active users have jumped 900% in the past year. Bolstering that claim is another recent study. At the end of last year, 11% of online American adults said they used Twitter or a service like it, according to a Pew Internet & American Life Project study. Twitter and Twitter-like services are used by about one in five online adults between the ages of 18 and 34. Ten percent of 35- to 44-year-olds and 5% of 45- to 54-year-olds use Twitter.

Institutional Venture Partners and Benchmark Capital underwrote the additional funding.

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