July 22 (Bloomberg) -- Twitter Inc. is close to raising $800 million in funding and will use half the money to buy back shares from its employees and backers, according to two people with knowledge of the plan.
The investment, which values Twitter at $8 billion, is being led by Digital Sky Technologies and may be completed in the next two weeks, said the people, who asked not to be identified because the funding hasn’t been made public.
Twitter’s staff of about 600 workers will get the chance to capitalize on their shares through private investors, rather than having to wait for an initial public offering. The company has remained on the sidelines during this year’s resurgence in IPOs. LinkedIn Corp., a professional-networking site, went public in May. Since then, Pandora Media Inc. sold shares, and Groupon Inc. and Zynga Inc. have filed for their own offerings.
Twitter’s worth has more than doubled since December, when it received a $200 million investment led by Kleiner Perkins Caufield & Byers that gave it a $3.7 billion valuation. It was pegged at about $1 billion in 2009, a person familiar with the matter said at the time. SharesPost Inc., an exchange for shares of closely held companies, has assessed Twitter’s current worth at $7 billion.
Investors are enticed by the popularity of Twitter’s service, which lets users share 140-character messages. Its members include celebrities, executives and President Barack Obama, who together send more than 200 million messages a day. The company is working to make money from those users by selling advertising.
Sean Garrett, a spokesman for San Francisco-based Twitter, declined to comment.
The fundraising was previously reported by technology blog AllThingsDigital and the New York Times.
To contact the reporters on this story: Jon Erlichman in New York at Jerlichman1@email@example.com
Douglas MacMillan in San Francisco at Dmacmillan3@bloomberg.net
To contact the editor responsible for this story: Tom Giles at firstname.lastname@example.org