Although Snapchat still has hardly any revenue, venture capital firm Kleiner Perkins has slapped a $10 billion valuation on it through its latest funding agreement. The Wall Street Journal cites unnamed sources who have knowledge of the investment.

Snapchat

Snapchat raises funds

In the last several months, Snapchat has been talking with multiple potential investors. The messaging app company is seeking investments that would make it one of the most valuable private technology startups in the world. As of yet, Snapchat doesn’t even have much revenue.

According to the newspaper’s sources, Kleiner committed up to $20 million in funds in May. Also at least one other investor has committed to the investment round, which isn’t closed yet, according to those sources. They also said that DST Global, a Russian investment firm headed up by Yuri Milner also made an investment in Snapchat this year, placing a valuation of $7 billion on the company.

Kleiner targets hot tech startups

With a deal like this, Kleiner would have far less than 1% stake in Snapchat. Even though that’s such a small stake, however, the firm would see its relevance increase in the venture capital world. If Kleiner has wisely chosen Snapchat, it wouldn’t be the first time the firm got in on the ground floor of a hot tech company.

The firm was also an early investor in Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN). However, critics have said the company missed the boat on social media and messaging apps and also invested in too many green technology companies that ended up failing. Kleiner invested in Twitter Inc (NYSE:TWTR) and Facebook Inc (NASDAQ:FB) as well, but those investments were made after both companies had revenue and were nearing initial public offerings. Snapchat, however, is nowhere near ready for an IPO.

Snapchat’s valuation soars

Only about a year ago, Snapchat was valued at around $2 billion. It seems like not much has changed since then to warrant the massive $10 billion valuation, as the messaging app still doesn’t even have a solid business model. However, investors apparently see possibilities in monetizing the millions of young people who use the company’s app, which targets a demographic that is very popular with advertisers and hard to reach through traditional media.

Snapchat is expected to begin advertising this year and has reportedly been talking with media companies and marketers recently. Any new capital the company could raise would help it with advertising costs.