Snapchat Inc., a start-up offering a photo messaging application that automatically deletes the messages at a set period, has been valued at close to $10 billion dollars, with several venture capitalist ready to pour in money into the company despite the lack of revenue.

Citing anonymous sources, the Wall Street Journal reported that Kleiner Perkins Caufield & Byers has decided to invest $20 million for a 1% stake in Snapchat, which puts the company's value at the said amount. The report added that several other investors are interested in the tech firm even though it virtually has no revenue.

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It noted that Russian investment firm DST Global has also bought a stake in Snapshat earlier this year, although the start-up was then valued at $7 billion. The Wall Street Journal was not able to get comments from the two investors, while Snapchat played down the development.

The report said Kleiner has a good record of picking winners in the tech industry, having bought stakes in Google, Inc. and Amazon.com Inc. during the early years of those firms. However, the company's recent record is mixed, failing to invest in rising social media and messaging application companies.

Just one year ago, Snapchat was valued at $2 billion. This rise is attributed to its popularity among teenagers and college students, consumers whom advertisers have difficulty reaching through traditional media, according to the Wall Street Journal. 

The capital infusion could fund its entry into advertising later this year, the paper said. It noted that Snapchat has had meetings with media companies to offer a service that lets users read daily editions of publications, video clips, and ads by pressing the screen. The content disappears once the user lets go, a system much like the photos and apps sent through the app.

The report added that the company has yet to generate revenues, but the plans of its 24-year-old co-founder and chief executive Evan Spiegel has won over investors.

Over 100 million people use SnapChat every month, close to two-thirds log on daily, The Wall Street Journal reported citing an anonymous source. In comparison, Facebook's Whatspp, which was bought for $19 billion, and Twitter, valued at $29 billion, have 600 million and 271 million active monthly users, respectively.

The paper added that SnapChat turned down a $3 billion buyout offer from Facebook, while Alibaba Group Holding, Ltd. passed on in investing in Snapchat.

Tagssnapchat, Alibaba Group