Pinterest Inc. still makes little revenue, yet the scrapbooking site's value is soaring in the eyes of venture capitalists.
The company said Thursday it raised a $200 million investment that values it at $5 billion, making Pinterest one of the most valuable venture-capital backed startups in the world.
Investors are still willing to pay lofty premiums for tech startups with high potential for growth, even amid a stock-market decline that has sliced the value of several public tech companies. Last month, home-rental site Airbnb Inc. raised capital at a $10 billion valuation.
Pinterest's value has risen 32% since seven months ago, when the company raised $225 million at a price tag of $3.8 billon. Altogether, the four-year-old company has received $764 million in funding from a diverse group of investors including venture-capital firms Bessemer Venture Partners and Andreessen Horowitz; a hedge fund, Valiant Capital Partners; and a Japanese e-commerce firm, Rakuten Inc.
No new investors participated in the latest funding round. ReadWrite earlier reported news of the fundraising.
The San Francisco company recently began selling its first ads to marketers including General Mills, Kraft, Lululemon and Gap. Those companies have paid as much as $1 million to $2 million for three- to six-month commitments to run marketing messages on the site, according to a person who was briefed on the plans.
Pinterest's value has risen 32% since seven months ago, when the company raised $225 million at a price tag of $3.8 billon. Altogether, the four-year-old company has received $764 million in funding from a diverse group of investors including venture-capital firms Bessemer Venture Partners and Andreessen Horowitz; a hedge fund, Valiant Capital Partners; and a Japanese e-commerce firm, Rakuten Inc.
No new investors participated in the latest funding round. ReadWrite earlier reported news of the fundraising.
Pinterest lets users build online collections of photos on anything that interests them—say traveling or recipes—in the form of "pins." Since launching in 2010, the site has amassed more than 30 billion pins.
The San Francisco company recently began selling its first ads to marketers including General Mills, Kraft, Lululemon and Gap. Those companies have paid as much as $1 million to $2 million for three- to six-month commitments to run marketing messages on the site, according to a person who was briefed on the plans.
Pinterest could command higher ad rates than other social sites because its users have demonstrated an inclination to purchase products they pin on the site. Online retailer Wayfair found that visitors from Pinterest were 20% more valuable over time than average Wayfair visitors in terms of revenue.
The company aspires to compete with search engines like Google Inc. and Microsoft Corp.'s Bing by building new tools to help users discover content from around the Web. Last month, it unveiled a new "guided search" feature for its mobile apps, which produces a page of images based on the keyword a user enters, such as "hairstyles," and then prompts users to refine the search with more specific categories like "beehive" or "bangs."
Pinterest will use the new funding to ramp up its global expansion. The company has offices in the U.K., France and Japan, and its service is now tailored to users in 31 countries.
WSJ
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