America’s prettiest social media platform just raised a massive Series E to develop, monetize and globalize its service. Pinterest, the e-community built on image-sharing and “pinning,” today confirms a $225 million funding round that brings total investment behind the company to more than $538 million.
That’s a lot of dough for a business model still baking.
New investor Fidelity led the round with previous backers Andreessen Horowitz, Bessemer Venture Partners, FirstMark Capital, and Valiant Capital Partners contributing. The financing comes at a new, super-sized valuation of $3.8 billion. “We hope to be a great service that everyone uses to inspire their future, whether that’s dinner tomorrow night, a vacation next summer, or a dream house someday,” said Ben Silbermann, Pinterest co-founder and CEO, in the company’s official statement. “This new investment enables us to pursue that goal even more aggressively.”
Despite their prominent position on the social media landscape—the platform placed third in overall use in 2012, according to Experian—Pinterest remains somewhat of an industry enigma. The site draws 70 million users, says consumer insights startup Semiocast. But even with its mammoth user base, the site generates no revenue, having only just begun deploying advertising.
For some, surfing Pinterest feels like window-shopping. Advertising should therefore work well on the site, as its ecosystem skews aspirational. But the company seems to view monetization almost with distaste, and has succeeded so far in fending off the need to self-generate revenue with enormous capital investments.
As Pinterest rose to fame, so did expectations the company would go public. But it didn’t, and has since quietly and slowly moved towards revenue generation, testing monetization strategies earlier this month. The company announced in September it would experiment with promoted pins, and promised to guard the site against tacky banner ads. It seeks no five-second fix to ramp up revenues; instead, Pinterest looks to create a soufflé with a crowd-sourced recipe. “Nobody’s paying for anything yet—we want to see how things go and, more than anything, hear what you think,” writes Silbermann in a blog post.
Pinterest’s measured paces belie an identity pinned to rapid growth—but there’s no rush to market. “We’re a pre-revenue startup and don’t have any comment on a potential offering,” Pinterest’s head of communications and public policy Barry Schnitt writes in an email. “At this point, it’s not our focus or even on our radar.” For now, the site funnels funding towards globalization; service and mobile development; monetization; and talent and tech acquisitions.
Now available in the UK, France and Italy, Pinterest hopes to deploy its service in 10 new nations by year’s end.
There is such thing as too much money. After two huge late-stage rounds, one must wonder where the company will go next (certainly not public, at least for a while). Right now, Pinterest’s patience obscures its hockey-stick trajectory. Watch it rise.