Pinterest, the content discovery website that has achieved massive mainstream popularity by letting people clip and share their favorite photos and videos online with virtual "pinboards," is making itself clear that the company means big business by raising $200 million on May 16th, 2014.
The web-scrapbooking startup is now a $5 billion valuation, up from $3.8 billion last year.
The money came from existing investors, including SV Angel, Bessemer Venture Partners, Fidelity Investments, Andreessen Horowitz, FirstMark Capital and Valiant Capital Partners. The company that already tailored its service to 31 countries and has offices set up in France, the U.K. and Japan, has also attracted investors such as Japanese e-commerce firm Rakuten.
"Pinterest has a vision of solving discovery and helping everyone find things they'll love," said Pinterest CEO Ben Silbermann. "This new investment gives us additional resources to realize our vision."
The financing will help fund the expansion for the website. Pinterest that has began implementing a plan to generate revenue from advertising, has started selling ads to major corporations such as General Mills, Gap and Kraft, charging up to $2 million for three- to six-month commitments.
Pinterest's plan to sell ads was well received because many advertisers see Pinterest as a valuable advertising host since its users often purchase products pinned on the site - and this could allow the company to start charging ad rates that are higher than other social sites. Pinterest is also seeking to add users internationally and develop its ad program further.
It has long been a goal of Pinterest to become available all over the world. When the company raised $100 million in October 2012, it said international expansion was a major reason.
Pinterest is also improving itself so it's easier for people to find what they want by focusing on search in recent months. Although when Pinterest first launched in 2009, it seemed to be more like a social bookmarking space that allow users to gather images across the web and share them as collections, Pinterest is developing very quickly.
"Pinterest at its heart is about discovering things you didn't even know were there," said SIlbermann.
The company that had began translating its site and apps to some of the world's most common languages in mid-2012, has now gone far beyond. In the past few months, Pinterest has expanded to dozens of new languages, including Vietnamese, Malaysian, Tagalog, Thai, Greek, and Hindi.
Pinterest's last few technological developments have made the social sharing move to a more explicit focus on search and discovery. Pinterest no longer sees itself as an image-driven social network. Instead, it's a database of billions of images, selected and categorized by consumers and brands, all available for discovery.
Venture capital investment is at its highest level since 2001 and startups are seeing their highest median valuation increases since at least 2004, according to a survey of first-quarter deals by Fenwick & West LLP, a Silicon Valley law firm. Companies have more leverage with investors in deals, and the number of venture-backed firms pursuing initial public offerings is the highest since 2000, according to the survey.
This is Pinterest another massive funding after the social sharing site secured $200 million funding round led by new investor Valiant Capital Management on February 2013 and raised a $225 million round in October 2013 with the same group of investors. The new round brings the total raised to $764 million. And with the company's valuation to about $5 billion, making it one of the most valuable venture-backed startups in the world.
This frequent fundraising has given concerns over sky-high valuations for private internet companies. But the San Francisco-based startup plays a unique role in a trend web consumption, creation, and commerce shift from text to images.
