Pinterest investment catapults site to $1.5bn valuation
It has just 30 staff and has been running for little more than two years, but scrapbooking website Pinterest has secured $100m (£62m) of funding, catapulting it to a valuation of $1.5bn.
The rapidly-growing social network, which allows users to collect pictures, articles and other snippets on a virtual pinboard which they can then share with friends, was valued at $200m just seven month ago when it last raised investment.
Its extraordinary trajectory comes amid expectations that Facebook’s $100bn initial public offering will cast a halo effect on the rest of the technology industry, fuelling investment in other social networks.
Pinterest’s latest funding round was led by Rakuten, a Japanese e-commerce site, which invested around $50m in the site. Venture capital firms Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital also made investments.
The wesbite was founded by Ben Silbermann in December 2009 and launched to a restricted circle of users in spring 2010.
It only really took off after Mr Silbermann hired former Facebook designer Evan Shap and the pair developed an app for Apple’s iPhone.
Pinterest has soared from having 1m users last July to 20m in April, according to internet data company ComScore, setting a new record for any website to attract an audience of more than 10m.
It has also been singled out by analysts as one of just three strategic investments Facebook should make to fend off potential competition. The others were photosharing networks Tumblr and Instagram. Facebook is already buying the latter for $1bn.
Pinterest’s primary function is as a social network between friends, but many retailers use the site as a virtual shop window and claim that it has more than doubled customers’ average spend.
Rakuten’s chief executive, Hiroshi Mikitani, said there were “enormous synergies” between the two companies.
“While some may see e-commerce as a vending machine-like experience, we believe...retailers and consumers can communicate, discover, and curate to make the experience more entertaining,” he said.