Twitter is tweeting its venture capital investment which is the largest of its kind ever witnessed. The microblogging site has entered in a funding deal which values 800 million USD. Twitter however did not confirm the size of the round, it just said that the round led by Russian venture firm DST Global was “significant,” regulatory documents. This gives an indication that Twitter made use of the new shares which were sold for 400 million USD. Twitter, in December had closed its last venture round where the valuation of the company was quoted at 8 billion USD.
The format of the pay-in, was by 400 million USD investment and along with the investment, the route opted for was to allow the investors and employees of Twitter to get their shares cashed. This may be a unique method adopted but it isn’t a new one for DST Global. Looking back at its investment with Facebook two years ago, the same tactics were used by the company to invest. That move had eased the pressure on the management and for the insiders, liquidity was generated. But for DST Global, it was on the Silicon Valley’s map: investing 400 million USD in the Social Networking giant. Twitter stated that a few of its investors have invested earlier even for the funding round with DST.
According th VC Experts, the documentations which were shifted indicated that Twitter has agreed to shell out preferred stock of 24.9 million shares which have been valued at a price of 16.09 USD per share. VC Experts are data providers for the VC industry. The head of business intelligence for VC Experts, Justin Byers said that the division of shares were made into 2 classes, wherein one class of share were only permitted to have the participation right for the election of the board members of Twitter. Justin even noted that DST has had a past of not accepting the board seats as it was seen in their case with Zynga and Groupon. This stance would however have to be watched out for whether will they get a seat this time or no.
Yuri Milner, founder of DST Global released a statement in which the startup was termed as “one of the few companies that has truly changed the world.” He continued saying that they did not want to leave an opportunity to be a part of Twitter’s bright future. Justin however said that the authorization limit for Twitter says that they are allowed to sell off a maximum of 600 million shares as part for common stock. But as per their new agreement, it can be easily said that the company can be worth 8 billion USD.
Talking about the regulatory filings which are relate to the deal which valued 400 million USD, there are actually no such regulatory filings. The reason being that the agreement covers those shares which are taken over from the shareholders and not the new ones. But whatever may be the case, National Venture Capital Association’s research chief, John Taylor said that for venture capital deals, even the 400 million USD is a record breaking amount which has no deal really for comparison. The only available comparison here is of Twitter’s earlier venture capital with CrunchBase which was valued at 360 million USD.