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Pinterest raises $100 million, lifting its value to $1.5 billion

Japanese e-commerce firm Rakuten Inc. leads the fundraising for Pinterest, the virtual scrapbooking social network.

May 18, 2012|By Shan Li and Michelle Maltais, Los Angeles Times

Social media start-up Pinterest has raised $100 million in a recent financing round led by a Japanese online retailer, increasing the estimated value of the virtual scrapbooking company to $1.5 billion.

Japanese e-commerce firm Rakuten Inc. led the fundraising for the Palo Alto company, which is now ranked by Experian as the third-most-popular social network behind Twitter and Facebook.

Pinterest users check out thousands of images collected by fellow users and "pinned up" on their online scrapbooks. Retailers and other companies have flocked to the social network to market their goods and services.

Like Facebook and other social networks, Pinterest has struggled to generate revenue, but Rakuten's investment could lead to deeper integration with corporate partners.

Hiroshi Mikitani, Rakuten's chief executive, said his firm and Pinterest share the belief that using online marketplaces should be an "entertaining" process that encourages shoppers to explore.

"While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process," Mikitani said in a statement. "We see tremendous synergies between Pinterest's vision and Rakuten's model for e-commerce."

"Pin it" buttons, with which users can easily grab photos and post them to Pinterest, will appear on all of Rakuten's retail websites, which reach 17 countries, said Neel Grover, chief executive of Buy.com, a Rakuten site. He also said Mikitani would take on an advisory role at Pinterest.

"Pinterest wanted a strategic partner that can help its business in addition to its tremendous venture capitalist partners," Grover said.

The fundraising round valued Pinterest at $1.5 billion, according to tech blog AllThingsD. It also included existing venture capital investors such as Andreessen Horowitz, FirstMark Capital and Bessemer Venture Partners.

shan.li@latimes.com

michelle.maltais@latimes.com

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