Snapchat Inc., a messaging app company with no revenue, has been valued at $10 billion US by a California-based investment firm, according to a report in the Wall Street Journal.

The company, which makes an app for sending ephemeral messages via cellphone, is in the process of raising a round of investment and has successfully wooed support from  Kleiner Perkins Caufield & Byers, a Silicon Valley venture capital firm, the WSJ says.

A source estimated the investment by Kleiner of $20 million would value the messaging app company at $10 billion, making it a valuable potential tech start-up in the same league as Dropbox and AirBnB.

Snapchat reportedly turned down a $3-billion takeover offer last year from Facebook, which then turned around and bought messaging app Whatsapp for $19 billion.

Those figures illustrate the current passion for investment in apps, which bring with them established young users and their metadata, as well as marginally useful functionality.

For companies like Facebook or Yahoo, the hope is that when the app is past its best before date, the users remain accessible.

Snapchat, founded in 2011 by university students Evan Spiegel and Bobby Murphy, lets users communicate by sending each other photos and messages that automatically delete after a few seconds. A recent innovation lets users keep these photos.

More significantly, Snapchat claims to have about 100 million monthly users, approximately half of its rival Instagram, also owned by Facebook.

It has no regular revenue stream as yet, though a plan to add advertisements to its product line is expected to roll out this fall.

Financial firms such as Benchmark, Institutional Venture Partners, Lightspeed Venture Partners and Tencent Holdings of China have also invested in Snapchat.

There are reports that Snapchat is developing a new content service that would allow users to read daily editions of publications, video clips and ads by holding down a finger on the screen before the content disappears.