META Meta Platforms Inc

Snapchat Inc. keeps growing and raising cash, though its valuation hasn't changed much recently.

The startup featuring disappearing messages raised more than $1.8 billion in an investment round that stretched over more than a year, people familiar with the matter said. Several new investors, including Sequoia Capital, Spark Capital, Meritech Capital Partners and Dragoneer Investment Group participated in the funding, which valued Snapchat at close to $18 billion, the people said.

That valuation is higher than the $16 billion at which investors valued Snapchat in March 2015, because it includes the additional money from the latest funding round. All investors in that round bought common shares of the company for $30.72 apiece, the people said.

Snapchat has attracted a wide range of investors eager to own a piece of one of the most popular and rapidly growing mobile apps. Venture firms such as Sequoia and Spark rarely make an initial investment in a tech company so richly valued, a sign that they believe Snapchat could over time rival social-networking giant Facebook Inc., which has a market capitalization of roughly $342 billion.

Snapchat's willingness to extend the latest funding round at the same share price could reflect the cooler funding environment over the past year, a period in which many startups have seen investors mark down the value of their shares. It also could reflect an effort by Snapchat to temper expectations while growing its nascent advertising business.

Snapchat expects revenue of $250 million to $300 million this year, more than four times as much as last year's $60 million, according to a person who has been briefed on its financials. The company has worked with publishers to add disappearing news articles and videos to its app and this year struck deals with Viacom Inc. and ad tracker Nielsen to appeal to more advertisers.

Snapchat's funding round and financial projections were reported earlier by technology blog TechCrunch.

Mutual-fund giant Fidelity Investments, which has invested more than $175 million in two chunks beginning in March 2015, raised concerns around Snapchat's growth prospects when it marked down its shares in the company by 25% late last year. During the first quarter of this year, Fidelity marked the shares back up to its $30.72 purchase price.

In all, Snapchat has raised closed to $3 billion in funding from investors including Benchmark, General Catalyst Partners, Lightspeed Venture Partners, Coatue Management, DST Global, Yahoo Inc. and Alibaba Group Holding Ltd.

In another sign of investor interest, most of Snapchat's investors agreed to receive common shares, instead of preferred stock. Startup investors typically receive preferred shares giving them certain rights over common stockholders. Those privileges can include voting rights and, perhaps most important, getting paid back first in the event of an acquisition or liquidation.

Write to Douglas MacMillan at douglas.macmillan@wsj.com

(END) Dow Jones Newswires

May 26, 2016 18:45 ET (22:45 GMT)

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