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Twitter and Chegg investor gets a few big boosts from most existing contributors
VC firm Insight Venture Partners announced Monday that it has closed two new funds totaling $2 billion in investor commitments.
Insight Venture Partners VII received about $1.5 billion of institutional commitments and $70 million of affiliate and friend commitments. Insight Venture Partners Coinvestment Fund II, established for co-investments in larger deals, received $450 million in commitments.
The firm says a “significant majority” of existing investors committed to the new funds.
Founded in 1995 and headquartered in New York City, Insight focuses exclusively on software, Internet and data services around the world. Here’s a breakdown of some of the firm’s most notable, recent investments:
- Last week: Free website builder Wix raised $40 million in Series D funding led by Insight Venture Partners and DAG ventures, with Benchmark Capital, Bessemer Venture Partners and Mangrove Capital Partners participating.
- November 2009: Insight joined the ranks of Kleiner Perkins Caufield & Byers, Maples Investments and more when the firm helped tip Chegg’s funding over $100 million. The book rental service, which has by now raised over $200 million, is now expanding into new educational avenues.
- September 2009: Twitter closed a “significant” round of financing from Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital and Benchmark Capital. Though it was a late-stage round for Twitter, it will likely still prove very profitable for Insight.
- May 2009: Private fashion sales site HauteLook raised $10 million from Insight for the startup’s first round of funding. This one was awhile ago, but it’s noteworthy because it demonstrates the firm’s foresight; private sales and daily deals site proliferate like crazy these days.
To date, Insight has received over $5 billion in investment commitments. With its latest fund, the firm says it will invest up to $150 million per transaction.
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What is Twitter?
Twitter is an online information network that allows anyone with an account to post 140 character messages, called tweets. It is free to sign up. Users then follow other accounts which they are interested in, and view the tweets of everyone they follow in their "timeline." Most Twitter accounts are public, where one does not need to approve a request to follow, or need to follow back. This makes Twitter a powerful "one to many" broadcast platform where individuals, companies or organizations can reach millions of followers with a single message. Twitter is accessible from Twitter.com, our mobile website, SMS, our mobile apps for iPhone, Android, Blackberry, our iPad application, or 3rd party clients built by outside developers using our API. Twitter accounts can also be private, where the owner must approve follower requests.
Where did the idea for Twitter come from?
Twitter started as an internal project within the podcasting company Odeo. Jack Dorsey, and engineer, had long been interested in status updates. Jack developed the idea, along with Biz Stone, and the first prototype was built in two weeks in March 2006 and launched publicly in August of 2006. The service grew popular very quickly and it soon made sense for Twitter to move outside of Odea. In May 2007, Twitter Inc was founded.
How is Twitter built?
Our engineering team works with a web application framework called Ruby on Rails. We all work on Apple computers except for testing purposes.
We built Twitter using Ruby on Rails because it allows us to work quickly and easily--our team likes to deploy features and changes multiple times per day. Rails provides skeleton code frameworks so we don't have to re-invent the wheel every time we want to add something simple like a sign in form or a picture upload feature.
How do you make money from Twitter?
There are a few ways that Twitter makes money. We have licensing deals in place with Google, Yahoo!, and Microsoft's Bing to give them access to the "firehose" - a stream of tweets so that they can more easily incorporate those tweets into their search results.
In Summer 2010, we launched our Promoted Tweets product. Promoted Tweets are a special kind of tweet which appear at the top of search results within Twitter.com, if a company has bid on that keyword. Unlike search results in search engines, Promoted Tweets are normal tweets from a business, so they are as interactive as any other tweet - you can @reply, favorite or retweet a Promoted Tweet.
At the same time, we launched Promoted Trends, where companies can place a trend (clearly marked Promoted) within Twitter's Trending Topics. These are especially effective for upcoming launches, like a movie or album release.
Lastly, we started a Twitter account called @earlybird where we partner with other companies to provide users with a special, short-term deal. For example, we partnered with Virgin America for a special day of fares on Virginamerica.com that were only accessible through the link in the @earlybird tweet.
What's next for Twitter?
We continue to focus on building a product that provides value for users.
We're building Twitter, Inc into a successful, revenue-generating company that attracts world-class talent with an inspiring culture and attitude towards doing business.