Is Twitter worth US$1 billion?

Twitter is set to raise another US$100 million by the end of the week, despite having no real revenue stream.

The funding deal, which is expected to close today, is believed to involve up to seven investors.

They include private-equity firm Insight Venture Partners and fund manager T. Rowe Price, as well as previous Twitter investors, venture-capital firms Spark Capital and Institutional Venture Partners.

The deal values Twitter at $US1 billion, a source close to the deal told the Wall Street Journal. This is a huge increase from a capital raising earlier this year which valued the micro-blogging site at US$255 million.

The figure also represents almost three times the total of Twitter’s past capital raisings; since 1995, the company has raised $US35 million in equity.

The expected raising is close to double last week’s reports of an upcoming US$59 million raising.

Earlier this month, IVP Partner Steve Harrick told the Wall Street Journal that his company has a policy of investing in young start-ups.

“We’ve found that you can’t just have one mindset and run the same playbook that you would in a conventional time in the market,” Harrick says. “You have to be flexible, and that’s what we’ve been doing recently.”

Twitter has the ability to make several millions of dollars as soon as it introduces advertising, Harris says.

Earlier this month, Twitter announced it is considering options for including advertising on the site, including targeted business advertising.

The deal may prompt Twitter to move to New York, a move it has been considering. Several of the investors, including Spark Capital, are also based in the city.

Twitter has not yet publically commented on the deal.