Pinterest Raises $200 Million, Valuation at $2.5 Billion
02/20/2013| 08:56pm US/Eastern
Pinterest Inc. has raised a $200 million round of funding that values it at $2.5 billion, as the online scrapbooking site seeks to stock up on engineering talent and focus on its nascent business model.
Pinterest is coming out of a year of dramatic growth, which saw the number of visits to the site jump to 48 million in December from 9 million a year earlier, according to comScore Inc. data. The San Francisco-based company has meanwhile zeroed in on translating its popularity into sales by developing services for businesses.
"Our focus is on helping millions of people discover things they love," said Pinterest Chief Executive Ben Silbermann in a statement. "This investment gives us more resources to help realize that vision."
Launched in 2010, closely-held Pinterest enables users to "pin" photos and videos together in online collages. The site lets users follow one another and track their so-called boards according to personal interests.
Pinterest, which now has more than 100 employees, last raised funding in May of 2012 when it pulled in $100 million in a round led by Japanese e-commerce firm Rakuten Inc. (4755.JA). That placed its total capital raised at $140 million and valued the start-up at $1.5 billion.
Existing investors Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital participated in the new funding round, alongside first-time backer Valiant Capital Management L.P.
The Wall Street Journal had previously reported that Pinterest was seeking to raise a round of financing at a valuation of $2 billion to $2.5 billion. While Pinterest makes access to its service free, it has also been studying an advertising system and building relationships with businesses. Last year the firm made business accounts available, which enable users to do things like see which of their products are gaining most attention on the scrapbooking site.
Pinterest follows in the wake of a handful of Internet firms that received large valuations in private financing rounds before hitting the public markets--such as Facebook Inc. (>> Facebook Inc), Groupon Inc. (>> Groupon Inc) and Zynga Inc. (>> Zynga Inc).
Shares of Facebook, Groupon and Zynga all remain below levels set for the initial pricing of their respective IPOs.
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