Online pinboard Pinterest has raised additional funding that boosted the company's value to $3.8 billion.
An additional $225 million was raised in a funding round led by Fidelity Investments, according to a number of media reports. Pinterest's first funding round took place only two-and-a-half years ago.
CEO Ben Silbermann was quoted as saying the three-year-old company would use the funding to expand 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. This new investment enables us to pursue that goal even more aggressively."
Last month, Pinterest announced it is going to start experimenting with advertising in the form of promoted pins. Silbermann explained that promotion pins will only appear in search results and category feeds for now. "For example, a pin for a Darth Vader outfit from a costume shop might be promoted in a search for 'Halloween'."
World Wide Worx MD Arthur Goldstuck says Pinterest's use of advertising will have a significant impact on its valuation in the future, even more so because of the smart way in which it is done. "It is very clever. The ads are presented more as content than as marketing, and that will be the key to its success."
He notes there are both signs for and against Pinterest's future sustainability. "Clues for its success are the level of engagement it achieves and [the fact that] it is one of the most effective networks for persuading people to click through to visit other sites or content. What we've also found, and this is specific to SA, people tend to sign up to see what it is all about and when they don't get quick results they tend to move on. This should be a warning signal for Pinterest."
Goldstuck says there is a good chance Pinterest will list should it be able to come up with an adequate valuation, or it will perhaps be acquired by another company, such as Facebook.
A recent social media study done by World Wide Worx and Fuseware shows SA makes up 1.5% (910 000) of total Pinterest accounts (70 million). Of that number, 30% was active in the last month, with design, food, fashion and photography being the most searched terms.
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