Twitter has raised an additional $35 million. The money comes from venture capitalists Benchmark, IVP, Union Square Ventures and Spark Capital.

Twitter CEO Biz Stone says the money will go to expanding and improving the service. “Twitter is growing at a phenomenal rate. Active users have increased 900 percent in a year and even though our Web traffic is amazing, we see twice that traffic to the APIs,” Stone commented. “Our relatively small team of 29 employees has accomplished quite a bit lately but it’s obvious that we have the world ahead of us.”

Todd Chaffee, a partner at IVP told TechCrunch why he put money into a company that currently has no business model.

“Twitter is bigger than a lot of people realize and growing faster than a lot of people realize, but it has not hit the mainstream yet. It is just starting,” he said.

“Twitter does three things,” Chaffee explained. “It facilitates social connections with friends, colleagues, writers, and celebrities. The second is knowledge transfer. It is a real-time mechanism for tapping the wisdom of millions of people. The third is social expression. It is a mechanism for the global community to express itself.  It is the only thing we’ve found that has all of those things. None of the other things out there—Facebook, YouTube, LinkedIn—has all of those variables. That is why Facebook tried to buy them.”

More from the Twitter blog.