Pinterest has raised a $200 million round that values the company at $2.5 billion. The cash essentially buys the social sharing site more time to figure out how to actually make money to justify that valuation.
The round included participation from existing investors Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital, along with new investor Valiant Capital Management LP.
“Our focus is on helping millions of people discover things they love and get inspiration to go do those things in their life,” CEO Ben Silbermann said in a statement provided to All Things D, which first confirmed the funding. “This investment gives us more resources to help realize that vision.”
Launched in 2010, Pinterest practically came out of nowhere to become a widely used social media tool. It now has over 50 million unique monthly users around the globe, and has earned a place as one of the top three social networks in North America, alongside Twitter and Facebook. Its users “pin” photos and videos to a virtual peg board, creating a collage of their interests. Users can then follow each other according to personal interests.
The company’s last round of funding was $100 million in May of 2012. In total, it has now raised $340 million.
That’s a considerable amount of cash for a free service that has yet to form a monetization plan. Yet Pinterest clearly offers value that interests brands. An article in the Wall St. Journal earlier this month noted that Pinterest features a longer sharing lifecycle for its social content. Whereas content shared on Twitter and Facebook enjoy quality interaction, it’s a fast shelf life that quickly stales. Material shared on Pinterest, on the other hand, “can resurface months later when people continue to discover it,” the article noted, citing Hearst Digital Media that had 3 to 5 percent of its traffic come from Pinterest, compared to 1.5 percent each for Facebook and Twitter.
“The longevity of content [on Pinterest] is very valuable to us,” Brian Madden. executive director of social media for Hearst Corp.’s Hearst Digital Media told the Wall St. Journal.
Pinterest has reportedly been considering advertising, as well as a way to monetize its relationships with businesses. The company introduced business accounts last year that enable users to measure the attention their products are getting on the site.
Based in San Francisco, Pinterest employs 100 people.