Valuations are instantaneous. It is, roughly speaking, how much a buyer would have to pay to buy the company right now. That's easy to do with public companies because it is just "trading price * number of shares". Venture-backed companies typically use their last investment round for valuation, where, if they had $100M invested in the company for a 1% stake, you multiply that by 100 to get the $10B valuation.

It is likely an inflated number, but it's hard to tell because it isn't in an open market. It could be $1M or it could be $100B.