Pinterest value leaps 52% to $3.8bn
October 24, 2013 Leave a comment
October 23, 2013 11:44 pm
Pinterest value leaps 52% to $3.8bn
By Hannah Kuchler
Pinterest, the social network that styles itself as a scrapbook, has seen its valuation soar by more than 50 per cent in just eight months after its latest fundraising round valued the company at $3.8bn. The San Francisco-based company, which has yet to generate any revenue, raised $225m in a round led by Fidelity Investments with participation from existing investors. The social network had already raised $200m earlier this year at a valuation of $2.5bn.Ben Silbermann, Pinterest co-founder and chief executive, said the investment would enable the company to move more “aggressively”, including funding its international expansion and attempting to monetise the service.
“We hope to be a service that everyone uses to inspire their future, whether that’s dinner tomorrow night, a vacation next summer, or a dream house some day,” he said.
The three-year-old company announced last month that it would start rolling out “promoted pin” adverts which appear in search results and category feeds. The site is already popular with some consumer brands as users often pin products they like and use it to compile wish lists of things they would like to buy.
The money will be used to develop the technical infrastructure to make the site faster and more reliable, push the monetisation efforts worldwide and make “strategic acquisitions” of both talent and technology, the company said.
Brian Wieser, an analyst at Pivotal Research, said it was a “very big deal for Pinterest”.
“It provides them with more breathing room to evolve its commercial model,” he said. “Towards that end it provides Pinterest with negotiating leverage should it intend to eventually pursue a trade sale or otherwise delay going public without an established business model.”
Pinterest has 46m users with the number using the site on mobile, which has recently been a closely watched metric on Wall Street, growing 50 per cent since the start of the year.
Until this year, the scrapbooking site had been US-focused but it recently launched in the UK, France and Italy and plans to roll out the service in 10 more countries before the end of the year.
Existing investors Andreessen Horowitz, Bessemer Venture Partners, FirstMark Capital, and Valiant Capital Partners all contributed more in the fundraising round.
Other investors include Rakuten, the Japanese ecommerce company, which bought into the company in May 2012, and Valian Capital Management, a San Francisco hedge fund which led its last fundraising round.
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