Now that was fast – Pinterest just raised $100M at a valuation of $1.5B in a round of funding led by Japanese e-commerce site Rakuten Inc. Pinterest's existing venture-capital investors such as Andreessen Horowitz, FirstMark Capital and Bessemer Venture Partners also participated according to a press release.
Hiroshi Mikitani, CEO of Rakuten said: "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. We see tremendous synergies between Pinterest's vision and Rakuten's model for e-commerce. Rakuten looks forward to introducing Pinterest to the Japanese market as well as other markets around the world."
And the Japan connection makes sense as I have recently detected a dearth of Hello Kitty pins.
Seriously though, this is a staggering valuation growth rate as the company was just valued at over $200M late last year.
The timing for this transaction couldn’t be better as Facebook is still in the hype phase – investors are scrambling to be part of it and the demand for new social offerings seems to be at an all-time high. Moreover the potential large-scale defection of Facebook advertisers that some are predicting as a result of the public news of GM getting poor ad results hasn’t happened – at least yet.
Of course the pin-board based social network is new, growing quickly at over 20M users and is looking for a business model. The good news is a number of companies have said the visual social network drives more traffic to their sites than even mighty Facebook.
The challenge of course is how to turn those eyeballs into cash.
That will be the challenge – but if the site is already connecting buyers and sellers, there should be a way to take a piece of the transactions being generated.
At least that is what the investors paying the ever-escalating price the company’s shares are going for are hoping.