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Pinterest Raises $367M at $11B valuation
- Fizzadar 12y agoDoes anyone else think 11B is insane? Higher valued than Dropbox and Airbnb? They must have pitched hell of a monetisation plan.
- dntrkv 12y agoI think Pinterest is way more valuable than Dropbox. They have a great product, very large dedicated user base, and a very clear path to monetization.
- johnpowell 12y agoIsn't Pinterest more like del.icio.us in the sense that if something better comes along they are screwed? I understand that Facebook is hard to replace because you need to get everyone to migrate. Does that apply to Pinterest?
- adventured 12y agoDelicious never acquired a truly mass audience, they never got out of the niche of traditional bookmarks as far as their peak audience days were concerned. I'd say Pinterest has a few strong things in its favor: 1) it benefits from network effects, beyond anything Delicious saw; 2) people accumulate value in their use of the site, to leave is to abandon that effort; 3) they have a national (early global) brand, whereas most people never heard of Delicious 4) they dominate a demographic that is extremely valuable in line with their monetization plans, Delicious had nothing like it 5) Delicious was founded in 2003, the Pinterest scale potential in 2015 is drastically larger, with mobile opening a global audience of a billion potential users It's also worth noting that bookmarked web sites rot, disappear, etc. Being able to visually go back and look at concepts, ideas, inspiration - is far more useful over the long haul (eg after three years of content accumulation as a user).
- dntrkv 12y agoThat's always a possibility, but I think at this point it would be just as hard to dethrone Pinterest. A lot of the content on Pinterest is pinned from within the site itself. I dunno what the percentage is, but most people I see that use Pinterest are usually just browsing their feed which is made up of pins from the people they follow (and the topics they are interested in). You also have to consider the amount of time that people invest into creating their boards and organizing all of their content. My sister has somewhere close to 20,000 pins now organized into very specific boards. She also has hundreds of followers and follows a ton of people.
- aetherson 12y agoLess of a network effect than Facebook, I would think, because most users of Pinterest are pure content consumers, rather than hybrid content producers/consumers. That said, they have a very large library of existing content, a large number of producers who have devoted a fairly large amount of time to Pinterest, and also... a space in which it would be hard to distinguish yourself by pure feature competition. How do you make a website that is substantially better than Pinterest at showing pictures and letting people bookmark them? If you create incrementally better search/recommendation technology, I think it would be hard to communicate your tech advantage to the average user, particularly before you develop a deep content library.
- nl 12y agoThey have some decent network effects. People follow each other and there are curated boards that are almost sub-brands on their own. There have been some fairly well funded attempts to build a competitor (eg, Fab at one point tried it), but nothing really got close. It's probably not as sticky as Facebook, but OTOH there's a lot more purchase intent.
- jordanthoms 12y agoWell Airbnb is at 20B now, if that helps....
- funkyy 12y agoAnyway to see how much of the company is still in the hands of founders?
- amitutk 12y agoBy taking $367m at $11b valuation, they have given away ~ 3.33% in this round. You may work backwards for previous rounds. For initial rounds with no public valuation info, you may assume 25% of the company was given away in each round.
- birken 12y agoYeah, assuming all founders started out with 33%, they'd probably have 5-10% right now, probably closer to 5%. Best case scenario would be: 33% * (75% angel) * (75% series A) * (75% series B) * (85% series C) * (95%^4 Series D-G) = ~10% It could probably go down as far as 4 or 5% depending on how big option pools were and just how much dilution was in the earlier rounds.
- ChuckMcM 12y agoAnyone know if the founders took any money off the table?
- birken 12y agoI know nothing about their specific situation but based on this many rounds at this size they've almost certainly had the opportunity, and if they chose not to that would be very risky (and probably stupid).
- teej 12y agoI think it's less then that. Pinterest's early days were rough, and I heard that their B or C round was on unfavorable terms just to keep the lights on before they blew up.
- birken 12y ago
- deleted 12y ago[deleted]
- apalmer 12y agoseems weird to raise so much money at this point in the game... a third of a billion dollars...
- sharkweek 12y agoYou know when you hear about a lot of insane valuations and your jaw sort of drops in disbelief? I feel the opposite when I think about Pinterest. My immediate reaction here is "yeah, makes sense." I guess it must stem from my marketing agency days. I had SO MANY clients begging me to get them into Pinterest ads when they released. I also sit at home and see how much time my wife spends on the site and how dedicated she is to discovery through the app, especially as she makes many purchasing decisions after seeing things she likes pinned, from food to furniture. Seems like a no-brainer that this one is going to end up crossing the IPO finish line at some point, and I would imagine they have bigger and better plans moving forward. I barely think they've scratched the surface of profitability.
- taylorbuley 12y agoThe pre-business model unicorn thing still confuses me. The kicker in your comment -- scratching the surface of profitability -- is what I find interesting. What if they start digging to find there's no depth behind this surface? http://www.wsj.com/articles/viewers-dont-add-up-to-profit-for-youtube-1424897967 http://www.wsj.com/articles/viewers-dont-add-up-to-profit-fo...
- nl 12y agoI'm not sure what your point is? 1) Youtube isn't profitable, but it's taking more and more "hours watched" out of the TV market. Google can keep it running at break even for as long as they want, and then adjust the ad prices up very, very slightly and start making profit based on the huge audience. 2) Video watching (usually) has very little commercial intent, especially in terms of some kind of "commercial value per byte served" measure. This compares very badly to Pinterest, where a very significant amount of usage has almost direct purchase intent.
- tdees40 12y agoIf YouTube can increase ad prices without losing advertisers, why aren't they doing that now?
- lostsock 12y ago> Since launching in 2009, Pinterest has raised $764M dollars; once this round closes (whether or not they raise the full $578M), they’ll have surpassed the billion dollar mark. For the sake of this comment let's assume that Pinterest has never had any income at all... can someone please explain what they have spent, or plan on spending, over $1B on? If there isn't a plan to spend this money, what other motivations could they have for raising so much money and why are investors still pouring it in?
- jamiequint 12y ago500+ employees.
- CPLX 12y agoThen they are in excess of $2,000,000 per. That don't seem like the reason.
- lostsock 12y ago500 employees * lets say $150,000 per employee * 6 years is only $450,000,000. That leaves ~$150m from previous rounds to spend on infrastructure etc before they need to raise more in the latest round.
- mwcremer 12y agoConventional wisdom is that an employee costs the company twice their salary (insurance, facilities, etc.) So it's closer to $1 billion.
- lostsock 12y agoI expect that they would be paying each of their 500 employees less than $150,000 yearly salary so had inflated that price to include the other expenses involved in hiring someone. Perhaps it is a little on the low side but if you also factor in that Pinterest wouldn't have been employing 500 people since 2009 I'd hazard a guess $450m is on the high side, not the low, of their actual employee expenses.
- jdprgm 12y agonearly a million per employee. what the heck do they plan on using that much capital for... especially with forthcoming ad revenue.
- asavadatti 12y agoMoney is cheap right now.
- solve 12y agoGood, world needs more consumer internet startups. All the B2B has been getting depressing.
- woah 12y agoWhat are they going to do with the money? How good can they make their website?
- adventured 12y agoTechnology acquisitions can be very useful for a company like Pinterest, whether for talent or the tech. It's not difficult for a company to spend tens or hundreds of millions on acquisitions. There are no doubt useful companies out there for Pinterest to buy, no different than there have been for Facebook, Twitter, Google, et al. over the years of their various stages of maturity. At Pinterest's size, and given their long-term ambition to be a large, successful business... it's for all the non-obvious reasons you can't think of that a billion dollar cushion might be useful. Always raise money when you don't need it; raising it when you need it, is the worst time, you'll go begging on your knees or at a minimum will be in the weaker negotiating position.
- anigbrowl 12y agoThis seems like an amazingly high valuation for a company that basically does digital scrapbooking.
- deleted 12y ago[deleted]
- stevesearer 12y agoThink of it more like Google in that people search Pinterest for things they like and want to buy and it is much more interesting than a scrapbook. You can't really type 'shirt and shoes I like and want to buy' into Google, but you can do that same sort of thing on Pinterest. Pinterest can monetize that intent through affiliate deals and advertising like Google does with search intent.
- anigbrowl 12y agoI know, I don't think it's without value. I'm just not seeing how it's worth this much, though.
- rememberlenny 12y agoI work for a magazine corporation that does 86 million visitors a view a month. From the publication and media industry, this makes total sense. Within content circulation, Pinterest is often in the top tier of traffic referrers. They are often right after Facebook and in some cases even higher.
- patmcc 12y agoFor anyone who thinks this is high: when my wife (and lots of other women in her social group) is in the market for clothes, or wedding ideas, or baby/nursery ideas, she goes to Pinterest first. That is huge potential for monetization from advertising and affiliate sales. Pinterest is where shopping starts for tons of young women (primarily) with money.
- stevesearer 12y agoI think of Pinterest as a visually inspiring search engine. A large portion of people there just use it to browse around, but many people are going there as you mention with goal of finding something to buy. Monetizing that intent is basically the same concept as Adwords, just in a visual medium.
- logicallee 12y agopeople are saying that 'huge potential' is why someone gives you a million-dollar valuation even though your app doesn't have a revenue stream. we are talking about ten thousand times higher than that. still on 'potential'...
- foobarian 12y agoIt's more than shopping/ideas for shopping directly. Our nanny spends a lot of time on Pinterest to get ideas for crafts/activities with the kid, which are not purchasable items themselves, but still lead to sales indirectly. Another great mode of opportunity given some good analytics.
- codeshaman 12y agoGood. In the age when the planet is faced with overpopulation, climate change, pollution and a myriad of other issues, including the shadow of ww3, the investors bet on a photo-sharing startup. Down-voters rejoice, but I couldn't care less about pinterest and what it offers. Maybe I'm getting old or maybe being a parent gives me a different perspective, but 11B for nicely arranged list of photos is idiotic. I'm sure it makes a lot of business sense to the investors, which is the really sad part of it all.
- coke12 12y agoThis point of view is incredibly myopic; what you're seeing is what innovation looks like to people who don't benefit directly from said innovation. Knowledge discovery is huge, and it becomes especially profitable when that knowledge is tied to existing products (e..g expensive jewelry, wedding dresses).
- codeshaman 12y agoMaybe I'm myopic, or maybe everyone else is. The state of the world seems to show that the vast majority of people, even the smart ones, don't really get it yet. But they will, sooner or later the elephant in the room will be impossible to ignore. Let's hope it won't be too late then. The issue is this: the world doesn't need more 'innovation' - we've already innovated enough to the point of being on the verge, all in the name of 'products' and profit. If articles like 'California has 1 year left of water' doesn't sound alarm bells then take a look around - these kind of news are all over the world. Our only hope out of this is to apply what we already know and 'un-inovate' ourselves so that our children can have a chance of survival. Not for the sake of profit, but for the sake of future generations. And no, the governments, politicians and the like won't do it, they can't, they don't create the world - we do, the creators, the innovators. It is our responsibility to switch focus and really look at how we can apply our knowledge to the real world 'problems'. Pinterest's long term value (50+ years) is zero in my opinion, even though it might create a nice bubble in the short term.
- criloz2 12y agoThis is just another bubble, years of printing money and low interest rates, there is no way that Pinterest has that value, neither Uber with all its legal issues across the world. sorry downvote me all the what you want that is the true.
- deleted 12y ago[deleted]
- curiously 12y agoThis shows that we are in a major bubble...finally poised for a major major market correction.
- bobbles 12y agoI love pinterest because the type of people on Hacker News are obviously not the target audience and so can't understand it. Someone gets engaged. Almost every day between that day and their wedding will be on pinterest to get great ideas on every single item / food / clothing involved. It's like amazon referrals on steroids
- Vomzor 12y agoA lot of people here dismiss Pinterest as just a "digital scrapbook" or "marketing tool". And while Pinterest is those things, it's also a new way of searching. And that's where the real value of Pinterest is. Their search technology has the potential to rival Google. I think that's worth a valuation of several billion dollars.
- bcg1 12y agoThat's larger than the market cap of LG, Citrix, Mitsubishi, Isuzu, Nvidia, to name a few. And those are companies that produce real goods and have real assets. But is it overvalued? Only time will tell
- nemo44x 12y agoProducing real goods leads to small margins. Materials, manufacturing and transporting are not cheap to do. Technology companies enjoy high valuations based on their generally very high margins.
- bcg1 12y agoMargins are irrelevant without sales. Also http://www.investopedia.com/terms/b/bookvalue.asp http://www.investopedia.com/terms/b/bookvalue.asp Can't really understand why I'm downvoted for this, since all I did was state a fact.
- Mahn 12y agoI'm surprised they didn't get acquired yet. Surely they must have turned an offer or two down by now.
- sgustard 12y agoMay have turned down 100s of millions from Google in 2012. http://techcrunch.com/2012/01/19/ginterest/ http://techcrunch.com/2012/01/19/ginterest/
- deleted 12y ago[deleted]
- nl 12y agoI've said it before. Pinterest is what Delicious should have been, if Yahoo had any vision at all.
- downandout 12y agoIt's getting awfully frothy around here. I keep getting reminded of headlines like these (except that the numbers are even more insane now): http://www.nytimes.com/1999/10/26/business/excite-home-to-acquire-bluemountain.html http://www.nytimes.com/1999/10/26/business/excite-home-to-ac...
- jpadkins 12y agoits a visual search engine that is taking share from google. It's ad formats perform as well as search ads. $11B is undervalued, especially compared to whatsapp et al.
- PublicEnemy111 12y agoIsn't the holy grail of advertising perfect targeting? Users aren't annoyed by the perceived degradation of the platform where the ads are served, ad companies don't waste money on ads the user isn't interested in, and the clicks result in far more revenue. Pinterest is a leap in this direction. They have enormous potential and a brilliant team. I can't remember a time I've purposefully clicked an ad on Facebook/Twitter. The only problem with Pinterest is that it seems plagued by duplicate content.
- clarky07 12y agoI wish they would just hurry up and IPO so I could invest in them. Anyone who thinks Pinterest isn't worth much, or it's just a scrapbook website, clearly doesn't have a woman in their life. My wife (and really every woman I know) use Pinterest all the time WITH THE INTENT TO PURCHASE things. Planning weddings, and nurseries, and houses, and remodeling, and and and... That is why Google is valuable. People go there with intent to buy things. Facebook has learned how to make money. Twitter has learned how to make money. Pinterest has a much much easier road than either of those did. The people investing in this round will absolutely make money.
- ulfw 12y agoGetting some more money in before the bubble bursts. Intelligent move. Everyone should do that before it's too late.
- WorldWideWayne 12y agoI can't stand Pinterest or any other site that forces me to login to see content that they copied from other sites.