Pinterest is raising $100 million in a funding round that was announced yesterday. The investment, Pinterest’s third, places the two-year-old social bookmarking site’s valuation in the range of $1 billion- $1.5 billion.
Japanese e-commerce giant Raukten won the heart of the social bookmarking site by leading a $100 million round of investment.
While the latest round of funding for Pinterest has been the most hotly sought of late in tech circles, one source said Pinterest's Co-founder and CEO Ben Silbermann was looking for a global strategic investor and had talked to several large Asian companies.
Said one source on why he settled on Rakuten: “He just really liked them.”
Partnering with Raukten could open doors for Pinterest in Asia. The startup, which is still in invite-only beta, has enjoyed increasing mainstream recognition in the U.S., but has made little headway abroad. Meanwhile, clones are popping up like weeds.
One sign that Pinterest’s focus is growing increasingly international: a recent post to Pinterest’s corporate blog seeking for translators for local-language editions of the site. From French to Swedish.
Still, Pinterest seems to have great revenue-earning potential, given that the network is already driving sales for some retailers.
Pinterest has raised $37.5 million in venture capital to date. Current investors include FirstMark Capital, Bessemer Venture Partners, Andreessen Horowitz and Ron Conway.
It’s interesting that the latest round did not include an institutional investor or new venture capital firms, since everyone wanted to be part of the deal. Sources said round that is the way Pinterest wanted it.
Silbermann has been concerned with Pinterest’s global growth as well as growing international clones, and was looking for a partner with which the start-up could work closely.
“Ben did not want any more VCs,” said one source. “He wanted an investor that moved the company forward.”
Rakuten will presumably help advise Pinterest on turning their pretty pictures into purchases, as commerce is already starting to emerge naturally on the site.
It’s a good choice of partners in that regard. Rakuten is one of the largest e-commerce companies in the world, with a flagship site Rakuten Ichiba. It was founded in 1997 and had revenues of $4.7 billion in 2011. Its CEO is Hiroshi Mikitani,
One the richest men in Japan, Mikitani is one of the best known entrepreneurs there; he has been described as “Richard Branson meets Jeff Bezos.”
Of the investment, Mikitani said, “While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process where both retailers and consumers can communicate, discover, and curate to make the experience more entertaining. We see tremendous synergies between Pinterest’s vision and Rakuten’s model for e-commerce. Rakuten looks forward to introducing Pinterest to the Japanese market as well as other markets around the world.”
“Our goal is to help people discover things they love, by connecting people through their shared interests. Bringing Rakuten on board gives us an amazing opportunity to move a step closer to this goal,” said Silbermann.
Founded in 2008, Pinterest, is a social collection site where users can “pin” their images through a handsome graphical interface.