Twitter 'valued at £625 million'

Micro-blogging sensation Twitter is to secure a cash injection from investors valuing the business at one billion dollars, it was reported today.

The popular online messaging site is thought to have lined up 100 million US dollars (£62 million) in financing, according to the Financial Times.

This would value the firm at one billion dollars (£625 million), even before it earns its first meaningful revenues.

Twitter, which allows users to post messages of up to 140 characters in length over the internet or on mobile phones, is thought to have secured the backing of a consortium of new and existing investors for the deal.

The valuation of the business is four times that of an investment earlier this year, an indication of the growing popularity of the site.

In February the website raised 35 million dollars (£21.8 million) in a deal that valued the business at around 250 million (£156 million).

Twitter's fundraising is thought to have come after substantial interest from potential investors including larger media, internet and telecoms firms.

There was speculation last week that Twitter wanted to raise 50 million dollars, but it is thought the firm doubled the amount in response to the level of interest in the move.

A person close to the firm told the Financial Times that the deal could be announced as early as today.

"They certainly didn't need to (raise the money)," the person added.

It is understood the firm, which has just 100 staff, is likely to use the money to increase the scale of its service.

The firm is still debating how to create revenues from its business and is thought to be mulling charging brands for extra services and has not ruled out some form of advertising.

Existing investors supporting the plan are thought to be Spark Capital and Institutional Venture Partners, while new participants are understood to include the mutual fund giant T. Rowe Price Group and private equity firm Insight Venture Partners, according to the Wall Street Journal.