New funding values Twitter at $1bn

Twitter's new funding will allow it to produce revenue-generating products

Twitter has been valued at $1bn (£614m) after a new round of funding to the tune of $50m (£30m) announced by the micro-blogging site's chief executive, Evan Williams. The company is said to have raised $55m (£33m) to date, and to have around $30m (£18m) in cash.

Insight Venture Partners, a New York private equity firm, which has raised funds of $3bn, is thought to be the biggest investor in this latest round of funding, according to a report on TechCrunch.

However, while financial analysts have arrived at the $1bn price tag by extrapolating from the valuation of the funding Twitter achieved in February, a report in The Wall Street Journal quotes finance professor Anant Sundarem as saying that Twitter could be worth as much as $2.7bn (£1.6bn).

Sandarem assumes that Twitter will be able to drive profit in a similar way to Google because of its low-cost, high-margin business and huge user base, said the report.

Twitter said in February that it would start creating more revenue-generating products after raising $35m (£21m) in funding from US venture capital firms Benchmark and Institutional Venture Partners. The funding was thought to have increased Twitter's valuation to $250m (£153m).

Twitter said in a blog post at the time that it had not actively sought the funds, but that investors were attracted to the firm because of its strong growth. It is unclear whether this next round of funding is a similar deal.

What is clear, however, is that the revenue-generating products like Account Verification, which Twitter is currently rolling out in beta, look set to continue.