UPDATE 3-Pinterest financing values company at $1.5 bln

Thu May 17, 2012 1:43pm EDT

* Japan's Rakuten leads $100 mln investment

* Other investors include Andreessen Horowitz, Bessemer, FirstMark Capital

* Rakuten CEO Mikitani to take advisory role at social networking firm

By A. Ananthalakshmi

May 17 (Reuters) - Silicon Valley startup Pinterest raised $100 million from a group led by Japanese online retailer Rakuten Inc, valuing the company at about $1.5 billion and underscoring the huge investor appetite for social-networking companies.

The news comes a day before Facebook starts trading as a public company that could be worth more than $100 billion.

Pinterest, an online scrapbook where users can "pin" images and follow others, has grown from less than one million users in May 2011 to about 20 million in April, according to IT research house comScore.

The three-year old company, led by co-founder Ben Silbermann, had been seeking financing for several weeks, but many investors were wary about the billion-dollar valuation, venture capitalists said.

That valuation puts Pinterest beyond the reach of all but a handful of potential acquirers, probably putting it onto a path for an eventual IPO rather than an acquisition.

Still, the company attracted many interested parties.

"It was one of the most hotly contested and sought-after financing events in Silicon Valley in quite some time," Mike Jaconi, a Rakuten executive who was involved in the negotiations, told Reuters.

Jaconi said Rakuten's presence in 18 countries helped it get a piece of Pinterest as the U.S. company was looking to expand internationally.

Rakuten's CEO Hiroshi Mikitani will take on an advisory role at Pinterest, Jaconi said.

A Pinterest spokeswoman said the Japanese company would integrate the "pin it" button on its websites.

Rakuten, which offers services ranging from online golf reservations to internet banking, was joined in the investment by existing Pinterest shareholders Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital.

Rakuten is aggressively expanding into global markets. Last year, it bought Canadian ebook company Kobo for $315 million and UK online shopping site Play.com for about 25 million pounds ($39.53 million).

HIGH VALUATIONS

Valuations for consumer-oriented tech startups have been rising dramatically, as illustrated by Facebook's $1 billion purchase of photo-sharing application Instagram last month.

Pinterest's $1.5 billion valuation is up sharply from $200 million late last year.

The company, like Instagram, has no significant revenue.

A Pinterest spokeswoman declined to disclose the company's revenue, saying it is not focused on monetization for now.

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (2)
thethingstodo wrote:
What are some sites like Pinterest?

May 17, 2012 2:38pm EDT  --  Report as abuse
thethingstodo wrote:
Here are a few I’ve came across…

Boxnutt (http://boxnutt.com): Reddit meets Pinterest
Pinspire – same as pinterest
Chill (http://chill.com): for videos
Trippy (http://trippy.com): for travelling
Gentlemint (http://gentlemint.com): for guys

If you google pinterest clones you can find more

May 17, 2012 3:21pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.