The Strategist

Pinterest: a Company Without Plans but with Promising Future

05/12/2015 - 16:14

Social network Pinterest has drawn additional $ 186 million in the seventh round of funding, which has brought $ 553 million to the service. Thus, the total number of funds raised amounted to $ 1.3 billion and market capitalization by $ 11 billion. Not bad for the company's five years, which business model is still uncertain.

The new round of investment will make the company one of the most expensive start-ups around the world. The current round was the seventh (round G) in the history of Pinterest. In May last year, the company raised $ 200 million and was valued at $ 5 billion. The company’s investors are the Japanese Rakuten, fund Valiant Capital Partners, as well as the firm Bessemer Venture Partners and Andreessen Horowitz. In general, G round raised up $ 764 million for the company, and its view of the total investment will be over $ 1 billion.

After the current round Pinterest will become one of the few startups, whose market capitalization exceeds $ 10 billion. According to The Wall Street Journal, at the moment, there are nine companies in the high-tech sector. The services Uber Technologies and Snapchat have overstepped the level of $ 10 billion, and the most expensive is the private company Xiaomi.

Investments made Pinterest one of the most expensive non-public Internet companies. Analysts wonder, how come that the company not making any money and having no business model can be estimated so high. According to market experts, the valuation is too high. It is believed that the start-up investors seeking "round with increasing" when the stock price at the subsequent round of funding is getting bigger.

The company, which provided such impressive means, must have a plan of development for sure. The co-founder Evan Sharpe shared his vision of the Pinterest’s future in the interview with BusinessInsider.

The international markets are in the main focus of the development. With the release to other countries, the content should also become more geographically targeted.

The head of the service says that gradually people are stopping regarding Pinterest as a social network, what, according to Sharpe, is a good sign. "The purpose of the service - not to communicate and not to share content with friends, but collecting ideas for the future."

Pinterest - social internet service, photo-sharing site that allows users to add online images and place them in thematic collections and share them with other users. The downloaded images to the service are called ‘Pins’, and the collection to which they belong - ‘Boards’. The site is especially popular among women thanks to the artistic features of its design.

Pinterest is one of the most visited social networks in the US, along with Facebook and Twitter.

The service was launched in 2009, the free registration was opened three years later. In 2014, the number of users of Pinterest outside the United States has doubled, and now they make up more than 40% of the audience of the social network against 28% in 2013.