Pinterest valued at $3.8 billion


SAN FRANCISCO (Reuters) – Pinterest has won a $225 million (139.1 million pounds) round of equity funding that values the virtual scrapbooking website at $3.8 billion, the company announced on Wednesday.

The deal, led by Fidelity Investments, makes Pinterest one of the most valuable privately held consumer internet companies just 2-1/2 years after it secured its first round of venture capital financing in May 2011.

Fidelity will not take a board seat as part of the deal, a person familiar with the deal said. Previous venture capital investors, including Bessemer Venture Partners, Firstmark Capital, Valiant Capital Management and Andreessen Horowitz, also participated in the latest round.

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The company said it would use the capital to expand internationally and develop its mobile apps.

“We hope to be a service that everyone uses to inspire their future, whether that’s dinner tomorrow night, a vacation next summer, or a dream house someday,” Chief Executive Ben Silbermann said in a statement. “This new investment enables us to pursue that goal even more aggressively.”

In just the past 18 months, Pinterest’s valuation – it was pegged at $1.5 billion last May – has ballooned in dramatic fashion absent proof of its moneymaking ability.

Silbermann unveiled a revenue strategy for the first time last month when he announced a “promoted pins” advertising product.

Still, with Twitter Inc primed to go public in a matter of weeks, the spotlight could shift to Pinterest as a hot social media prospect coming down the IPO pipeline.

Like Twitter, Pinterest is among the most popular of the fast-growing crop of social media websites, but there remain signs that the company is struggling to keep many of its users coming back.

According to a recent survey by Reuters and Ipsos, 26 percent of the 807 people polled who had signed up for Pinterest said they do not use the service anymore and 9 percent of people who signed up have since shut down their accounts. The results have a credibility interval, a measure of accuracy, of plus or minus 3.9 percent.

The funding was reported earlier by AllThingsD.


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