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A man walks past Snapchat's headquarters in Venice, Calif., on Oct. 13, 2014.Lucy Nicholson/Reuters

Snapchat Inc. is seeking a new round of funding that would value the company as high as $19-billion (U.S.), a person with knowledge of the matter said, making it the third- most valuable venture-backed company in the world.

Snapchat, which makes a mobile application for sending photos and videos that disappear within seconds, wants to raise as much as $500-million, said the person, who asked not to be named because the talks are private. Executives are in advanced discussions with fund managers, the person said.

The Los Angeles-based company would be valued at $16-billion to $19-billion in the financing round, the person said. At that level, Snapchat would be ranked behind only mobile car- booking application Uber Technologies Inc. and Chinese smartphone maker Xiaomi Corp. in the top three startups backed by venture capital firms, according to data compiled by researcher CB Insights. Xiaomi is valued at $45-billion, while Uber's latest round pegged its value at $40 billion.

That value is also close to the $22-billion Facebook Inc. paid last year for WhatsApp Inc., a messaging company that now has 700 million users.

Snapchat's valuation has skyrocketed since it was born in 2011 out of a Stanford University fraternity house. Chief Executive Officer Evan Spiegel, 24, turned down a $3-billion acquisition offer from Facebook in 2013 and went on to raise funds from 23 investors at a $10-billion valuation last year. That increase has corresponded with a surge in venture spending to the highest level in more than a decade.

Jill Hazelbaker, a spokeswoman for Snapchat, declined to comment.

Funding Surge

Venture capitalists pumped $48.3-billion into U.S. companies last year, according to data from the National Venture Capital Association and PricewaterhouseCoopers, the most since 2000. Venture financings of more than $500-million hit a six- year high last year, CB Insights said.

Snapchat lets people take and draw on photos, then send them to select friends or add them to a public "story." The photos and videos disappear seconds after the recipient views them. The company says its users -- the app is popular among teens -- send more than 700 million disappearing "snaps" and view more than 500 million stories daily.

Last year, Snapchat started showing short-form advertisements that are optional to click on and disappear after they are viewed, like its other content. The company has promised not to use any demographic information to target information to individuals. That differs from the business models of social-media competitors Facebook and Twitter Inc., which pitch their ability to serve advertisers based on their users' interests and activities.

New Features

Snapchat also has been developing new features to make it more of a destination for entertainment, a strategy that could help it lure more viewers and sell more ads.

In January, Snapchat started Discover, a kind of short-form television, betting that its users will like having their news and entertainment curated, as opposed to reading it in a feed as they do on Facebook or Twitter. The service lets users browse content from 11 different channels, including CNN, ESPN, Comedy Central, Cosmopolitan, Vice and Yahoo News.

The company's fast-growing and young audience has already drawn some studios to create exclusive content for the application. Snapchat is getting its own superhero series, where stars from YouTube and Vine are featured in short clips. Vice Media Inc. first released a report that it filmed inside a Chinese bitcoin mine on Snapchat, where it was viewable for 24 hours before disappearing and moving to other platforms.

Snapchat disclosed late last year that it raised $485.6 million from 23 investors, including Yahoo! Inc. and venture capital firm Kleiner Perkins Caufield & Byers. Previous investors include Lightspeed Venture Partners, Benchmark and Institutional Venture Partners.