Today, it was revealed that Pinterest has raised $100 million; valuing the three-year-old company at nearly $1.5 billion. This is a vast difference from last year when the company was estimated by the Wall Street Journal at only $200 million.
The Silicon Valley startup received its boost from Japanese company Rakuten Inc., one of the world’s largest online marketplaces.
Pinterest is an online scrapbook of sorts where users are able to “pin” images to their boards and follow boards and images by other people.
“Our goal is to help people discover things they love, by connecting people through their shared interest,” said Ben Sibermann, co-founder and CEO of Pinterest in a statement. “Bringing Rakuten on board gives us an amazing opportunity to move a step closer to this goal.”
Pinterest has grown from less than one million users in May 2011 to about 20 million in April, according to comScore (News - Alert).
In April, the Palo Alto startup was ranked as the 16th most popular website in the United States, ahead of sites such as PayPal, ESPN (News - Alert).com and The Huffington Post by Web analytics company Alexa. It was also rated as the third most popular social network site in the United States, behind giants Facebook (News - Alert) and Twitter.
“It was one of the most hotly contested and sought-after financing events in Silicon Valley in quite some time,” Mike Jaconi, a Rakuten executive involved in the negotiations, told Reuters.
According to a press release by Rakuten, the investment marks the start of a strategic partnership between Rakuten and Pinterest to help expand in Japan and into Rakuten’s 17 other global markets.
Founded in 1997, Rakuten is headquartered in Tokyo and is among the top 10 Internet companies in the world.
Rakuten’s CEO Hiroshi Mikitani, who will take on an advisory role at Pinterest added , “While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process where both retailers and consumers can communicate, discover, and curate to make the experience more entertaining;” adding, “We see tremendous synergies between Pinterest’s vision and Rakuten’s model for e-commerce.”
In a recent interview with FT, Mikitani also noted how Pinterest is more targeted with its audience and use of graphics, which is very effective in creating interest circles.
“Having a good grasp of images is becoming more important for e-commerce,” Mikitani commented. “It’s more straightforward and appealing to the instinct of human beings than text. That is the strength of Pinterest, I think.”
Edited by Jamie Epstein
