Big Cash Investment Raises Pinterest’s Profile


Pinterest’s announcement that it has raised $100 million in financing should be a source of comfort for those PR pros who have already added the visual-heavy social network to their digital arsenal. The investment, which is being led by Japanese e-commerce company Rakuten, will reportedly value Pinterest at $1.5 billion dollars, indicating that investors are confident in the company’s potential for growth.

And why shouldn’t they be confident? Pinterest has seen its number of total users grow from 1 million in May 2011 to nearly 20 million as of April 2012, according to data from comScore. And if there is one constant in this current period of high valuation numbers and public offerings of prominent tech companies, it’s that the market is being dictated by consumer usage and demand. After all, Facebook couldn't have reached a $104 billion valuation without being able to boast about a global user base that exceeds 900 million.

Rakuten’s investment in Pinterest, which tech Web site All Things Digital reported could be as much as $50 million, also presents a window into what’s on the horizon for the social network. In the joint announcement of the funding round, the companies said that Rakuten’s investment also marks the start of a strategic partnership between the two companies to help expand Pinterest in Japan as well as into Rakuten’s 17 other global markets. In other words, we’re likely to see more users on Pinterest.

It may also pay dividends as Pinterest transitions into becoming, in part, an e-commerce platform. Rakuten describes its business model as one that “seeks to empower merchants to deliver Omotenashi, a Japanese high service mindset, which helps sellers create lasting relationships with customers.” In the age of social media, does that sound familiar?

Follow Sahil Patel: @sizpatel


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