Microblogging site Twitter has confirmed that it has received a significant round of funding, led by the venture firm DST Global. While the company did not say exactly how big the funding was, it is reportedly in the region of $800 million, which makes it one of the biggest fundings ever in the history of venture capital industry.

And the San Francisco-based micro-blogging maestros already know how they will use the fund just raised. Twitter will expand its reach and use the resources to “aggressively innovate, hire more great people and invest in international expansion,” says the company in a blogpost. Surely, $800 million may seem like a lot of money, but DST Global is no stranger to investing large sums. In fact, two years ago, it had put $400 million in Facebook.

There have been various reports regarding how much money DST may have invested and who the other investors are. Financial Times quotes a person familiar with the transaction and reports that DST has invested $400 million for 5 per cent stake in the company, with the global investment management firm T Rowe Price and an arm of JPMorgan leading a group of other investors. The latter’s asset management unit had raised $1.22 billion around February this year, for a fund called JP Morgan Digital Growth Fund. Around the same time, there were speculations that the company was planning to invest in Twitter, either directly or through buying up stakes from current investors.

The latest round of funding pegs Twitter at a roughly $8 billion valuation. That’s quite a leap from the $3.7 billion valuation Twitter had in December last year, when it raised $200 million from Kleiner Perkins Caufield and Byers, as well as existing investors. Ironically, Kleiner Perkins beat DST Global to the funding back then, according to All Things Digital, the Wall Street Journal’s technology blog that first broke the story.

But for Twitter, the latest deal is especially good going for a company that keeps losing its senior executives and founders, is yet to have a solid revenue model or steady profits for that matter, and is facing serious threats from the recently launched new social networking platform Google+.

Advertisers would have probably loved to leverage Twitter’s 200 million users and a similar number of daily tweets, but ever since its inception in 2006, the company has been trying to provide a viable advertising model and support for marketers.

Twitter is also working on a new ad-based system, which it has recently launched, ramping up the ‘Promoted Tweets’ service it had launched in 2010. The new system has been made available to some 1,000 companies, most of whom are believed to have been making repeat purchases, and Twitter may raise an estimated $150 million in revenues, thinks research firm eMarketer.

But, it has been struggling to capitalise on the fact that it was adding users faster than any other social media site in history.

Of course, ‘commerce’ may have never been a prime directive of the Twitter founders in the first place. The team had introduced a podcasting company called Odeo and Twitter was developed more as an afterthought and fun project, rather than a serious business venture. Evan Williams, Twitter’s former CEO, also happens to be the man behind Blogger, a very popular blogging platform which was later bought by Google.

The company’s current chairman and chief product executive also wears the hat of founder-CEO of Square.

The company has, however, managed to scale up well. For example, more than a million apps connect to Twitter now and Tweets per second (TPS) has sometimes reached the 7,000 mark.

There has been 182 per cent increase in the number of mobile users over the past year or so. The company has also stepped up hiring. Currently, there are 600 people on board – a significant rise from the 250 employees earlier. It has also made two key hires very recently – a new vice-president of marketing (Pam Kramer, who was with E*Trade earlier) and a director of global brand strategy (Joel Lunenfeld, former head of Publicis Groupe’s Moxie Interactive).

Incidentally, Groupon and Zynga have also received funding from DST. Are you curious to know more about DST Global? Here is a VC Circle report covering all that you wanted to know about the obscure Russian firm, but did not know whom to ask.

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