Another day, another head-scratchingly huge Sillicon Valley fundraising round. This time it’s the turn of scrapbooking site Pinterest, beloved by wedding planning spouses-to-be and interior design wannabes, which is raising up to $578m (£378m) at a valuation of $11bn.
The San Francisco-based startup has raised $367m so far in its Series G round, taking its total fundraising since being founded in 2010 to more than $1.1bn. But it’s not stopping there – it’s hoping to raise another $211m, according to an official US filing, having raised $200m at a $5bn valuation just 10 months ago from investors including Fidelity, Andreessen Horowitz and Japanese ecommerce giant Rakuten.
Getting to a Series G funding round without IPOing is pretty rare, but then again Pinterest has only just started to make money. That’s not necessarily a huge problem in its case: brands will no doubt be keen to buy up ‘promoted pins’ (a.k.a. sponsored posts) given so many users are on Pinterest for the specific purpose of planning what to buy for their wedding, living room redesign or Saturday night dinner party.
Pinterest, which already has more than 500 employees, doesn’t give out user numbers, but a study last June estimated it had 53 million monthly active users in the US, a figure that has no doubt increased since then. And it’s growing fast outside America – a spokesperson said yesterday that international users rose more than 135% in 2014, making up 40% of all users, compared to just 28% in 2013.
But nonetheless this latest fundraising bonanza (pin-anza?) is indicative of a rash of extraordinary tech valuations, from Uber ($1.6bn raised at a value of $40bn in January) to Snapchat ($200m at a value of $15bn last week). These are the vanguard and, especially Uber, the most likely to actually be able to turn a profit when they’ve stopped splurging so much cash on expansion.
This exuberance will no doubt be rubbing off on plenty of other businesses without such big prospects. And it may only take one unicorn turning out to be a horse before the whole thing comes tumbling down in a dotcom crash mark two. Or, at the very least, for tech’s next big things to be brought down a peg or two to rather more realistic valuations.