Twitter to raise US$800m – suggests US$8bn valuation

21 Jul 2011

It seems Twitter is on the verge of raising US$800m in venture capital in a complicated deal that will be used to cash out current investors and employees. It has also emerged that four key product people have left the company.

According to Kara Swisher of All Things Digital, the funding will include a second part in which US$400m will be used to cash out investors and employees. The deal, she says, is similar to a move by Facebook in 2009.

The Twitter funding deal could be closed as soon as next week. The funding round would value Twitter at US$8bn – double what Twitter was valued at when it raised US$200m in venture funding from Kleiner Perkins last December, in which it was valued at US$3.7bn.

Twitter’s revenues are estimated to be about US$200m at this stage.

In related news, TechCrunch reports that four key product managers at Twitter have been let go as part of a clearing out exercise by CEO Jack Dorsey. It is understood that the managers were closely affiliated with the previous regime led by Evan Williams, Biz Stone and Jason Goldman.

Williams, Stone and Goldman have returned to the Obvious Start-up Incubator where Twitter emerged from.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years