Pintereset, the social media site that lets users create virtual bulletine boards of their favorite items of interest on the web, has raised $100 million in a deal that reportedly values the company at $1.5 billion.
The news was first broke by All Things Digital.
The round was led by Rakuten, the Japanese media company, with participation from existing investors Andreessen Horowitz, Bessemer Venture Partners, and FirstMark Capital, as well as a number of angel investors. The deal theoretically makes Pinterest worth more than Instagram, which Google officially paid $1 billion, though in actuality it was a mixture of cash and stock that could be worth anywhere from $1,081,980,008 and $1,173,977,656, depending on Facebook’s IPO.
But the billion dollar mindset captivating the tech community certainly upped the ante and the stakes in this deal. Pinterest’s base has grown from less than one million users in May of 2011 to 20 million in April of 2012, according to Comscore, which stated the site is one of the fastest growing it has ever tracked. Pinterest is the 16th most visited site in the United States. A study by Shareholic last March revealed that the site dished out more referral traffic than Twitter.
“Our goal is to help people discover things they love, by connecting people through their shared interests,” Ben Silbermann, co-founder and CEO of Pinterest, said in a statement. “Bringing Rakuten on board gives us an amazing opportunity to move a step closer to this goal.”
The catch is that once Pinterest figures out a way to make money on its site, it will need to deal with pesky copyright issues. Most of the content shared on the website is copyrighted material, which could prove to be a thorn in its side once the company learns how to make a profit from it. Either way, $100 million is a nice cash pile to keep the fires lit as they figure out how to make online bullitine boards bank.
With previous investments in Buy.com, the Russian e-retailer Ozon.ru and Kobo, an e-book vendor, Rakuten plans to use its stake and investment in Pinterest to extend the site into Japan as well as unite it with its existing ecommerce relationship network.
“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,” Hiroshi Mikitani, the chief of Rakuten, said in a statement. “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.”