Update: We just got off the phone with IVP partner Todd Chaffee who says this round was actually in excess of $35 million. Apparently, $35 million is just the total of what Benchmark and IVP put in ($21 million and $14 million respectively), while the additional amount put in by Union Square Ventures and Spark Capital is still unknown. According to Chaffee, “Everybody wanted to protect their pro rata and then some.”
Biz Stone just announced on the official Twitter blog that Twitter closed a third round of funding led by Benchmark and Institutional Venture Partners last night. We have confirmation from IVP that the round was $35 million, and that Union Square Ventures and Spark Capital also participated. The news gels with our report last month that Twitter was raising a new round at around a $250 million valuation following Facebook’s failed attempt to acquire the company, with IVP as one of the leading investors.
Stone says the company was not actively looking for additional funding because they haven’t burned through all of the money from the last round. But he was impressed by both of the VCs who led the round (and presumably also impressed by some very favorable terms).
This is the first time either Benchmark or IVP have invested in Twitter. Union Square Ventures participated in both the Series A and Series B as well, while Spark Capital first joined for the Series B. For more information about Twitter’s funding history, refer to its CrunchBase profile. As part of this Series C deal, Peter Fenton from Benchmark will be joining Twitter’s board of directors.
According to Stone, this round is intended for Twitter to go from strength to strength:
Twitter is growing at a phenomenal rate. Active users have increased 900% in a year and even though our web traffic is amazing, we see twice that traffic to the APIs. Interacting with Twitter over SMS is also getting more popular every day. Our relatively small team of 29 employees has accomplished quite a bit lately but it’s obvious that we have the world ahead of us.
Stone has also indicated that it’s time for Twitter to get serious about making money, saying “We are now positioned extremely well to support the accelerating growth of our service, further enable the robust ecosystem sprouting up around Twitter, and yes, to begin building revenue-generating products.”