After a new round of investments, Snapchat has increased its company value to almost $10 billion, the Wall Street Journal reported.
Kleiner Perkins Caufield & Byers, a venture capital company, agreed to place an investment worth up to $20 million in Snapchat and its self-deleting messaging service. The investment gives Kleiner only a less than 1 percent stake of Snapchat, but would increase the Los Angeles startup to almost $10 billion.
The Journal also reported [subscription required] that at least one more investor has made commitments to inject funds into Snapchat in the latest investment round.
The latest funding round will increase Snapchat's value to make the company the most well-funded startup company in Los Angeles, going over the $191 million that is invested into NantHealth and the $215 million invested into JustFab, according to research company CB Insights.
Significant investment rounds continue to add value to Snapchat, which has raised almost $129 million before Kleiner's investment, despite the company not being able to generate any revenue from its messaging service.
The additional funds will allow Snapchat to develop advertising services for its messaging product, which would finally generate revenue for the company. However, investors have said that the company should focus on increasing its user base, as a bigger user base will make Snapchat's advertising services, once rolled out, more attractive to brands and companies.
Snapchat has a monthly user base of 100 million users, which is nearly half of the monthly user base of Twitter. Users send "snaps" to each other, which are short messages that may contain pictures or videos. The messages, which can also be further customized using text, sketches and filters, delete themselves after just a few seconds.
A year ago, Snapchat was only valued at $2 billion. The company's owners famously rejected a $3 billion offer to be acquired by Facebook last November. Snapchat then also rejected a $4 billion acquisition offer from Google.
In addition to the investment by Kleiner, Snapchat was also reported to be in discussions for a multi-billion dollar investment with a group led by Alibaba Group Holding Ltd., as the Chinese conglomerate looks to expand its presence in the United States ahead of its planned initial public offering.
Having received a valuation of $10 billion, Snapchat enters elite company, with the only other private, venture-backed startup companies receiving such a valuation being Airbnb, Dropbox, Uber and Xiaomi.
Other technology companies that Kleiner has invested in include Facebook, Google, Twitter and Amazon. Kleiner is also said to be one of the several investors that recently injected funding into Uber Technologies.
