Investor appetite for social networking companies is showing no signs of slowing down, after US-based start-up Pinterest raised $100 million, valuing the company at around $US1.5 billion.
Pinterest, founded by Ben Silbermann, Evan Sharp and Paul Sciarra, is a social networking site with a “virtual pin board” interface.
In essence, users collect photos and link to products they love, creating their own pin boards and following the pin boards of other people. Most of the site’s users are female.
While the site is currently invite-only, it has grown from less than one million users in May 2011 to about 20 million users in April, according to comScore.
The three-year-old company has raised $100 million in a new round of financing led by Japanese online retailer Rakuten, in a deal that values Pinterest at around $US1.5 billion.
But, like many tech giants, Pinterest has no significant revenue. In fact, a Pinterest spokeswoman declined to disclose the company’s revenue, saying it is not focused on monetisation.
Meanwhile, Rakuten joins existing investors Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital, in addition to “a number of angel investors”.
“The funding will allow Pinterest to continue improving its service and expanding its community globally,” a statement said.
“The investment also marks the start of a strategic partnership between Rakuten and Pinterest to help expand in Japan and into Rakuten’s 17 other global markets.”
According to Silbermann, Rakuten’s involvement in Pinterest “gives us an amazing opportunity to move a step closer to this goal”.
Rakuten spokesperson Mike Jaconi told Reuters that Rakuten’s chief executive, Hiroshi Mikitani, will take on an advisory role at Pinterest.
Development of the Pinterest website began in December 2009, and the site launched as a closed beta in March 2010. It then proceeded to operate in invitation-only open beta.
Nine months after the launch of the site, Pinterest had 10,000 users.
In 2011, Pinterest investors Kevin Hartz and Jeremy Stoppelman contacted Jeff Jordan, a partner at Andreessen Horowitz, to seek investment.
The firm accepted and led a $27 million funding round at a $200 million valuation.
In March 2011, Pinterest launched an iPhone app, which was last updated in February. An iPad app is also in the works.
Meanwhile, Pinterest Mobile – a version of the site for non-iPhone users – launched in September.
In December, the site became one of the largest social networking services, according to Hitwise. The next month, it drove more referral data to retailers than LinkedIn and YouTube.
That same month, the company was named the best new start-up of 2011 by TechCrunch.
At the South by Southwest festival in March, Silbermann said Pinterest was planning to implement revamped profile pages soon.
Also in March, the site became the third largest social network in the US, according to Hitwise, surpassing LinkedIn and Tagged.
Last month, Sciarra left his position at Pinterest for a consulting job as entrepreneur-in-residence at Andreessen Horowitz.