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Pinterest Completes $200M Funding at $2.5B Valuation

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Re: Pinterest Completes $200M Funding at $2.5B Valuation

#21

Post by nchuhoai »

I think Pinterest is in a great condition ... at this time.

Like they have tons of users who religiously use their product, and it's actually coupled with intent to buy, which makes monetizing easy.

However, you can't change the fact, that pinterest is riding on a "trendy" wave right now. There is not a whole lot that keeps you threre. Just in two years, there can be another spot where all the women in world woo about their lives.

It's an inherent social problem which accounts for the so far pretty short lives of social companies. You gotta have to be able to tie/commit your users much like Facebook does (owning your diginal private life).

Re: Pinterest Completes $200M Funding at $2.5B Valuation

#22

Post by andrewhillman »

kb120 wrote: post #13

Can someone shed light on how Pinterest and Instagram can be worth billions? But Reddit is only worth 400m?

This is a complicated question with many angles. First, Reddit is now apart of bigger company. Obviously, this changes anything to do with valuation. Do investors want a "piece" of a company that is within a bigger company? Maybe, but if they do the valuation is going to be a lot lower compared to if Reddit was independent.

The other issue is that Reddit makes money therefore the valuation is based on earnings. Their earnings might be low for the amount of traffic they get. Sometimes it's better to not generate any money because the valuation would be based solely user growth+engagement.

With this being said, if Reddit was an independent company then they too would have a crazy valuation. I am sure the founders think they sold way too early but at the time, it was the best option. Kudos to the buyer who didn't let it enter the M&A dead pool.

Re: Pinterest Completes $200M Funding at $2.5B Valuation

#23

Post by BrianEatWorld »

nchuhoai wrote: post #21

I think Pinterest is in a great condition ... at this time. Like they have tons of users who religiously use their product, and it's actually coupled with intent to buy, which makes monetizing easy. However, you can't change the fact, that pinterest is riding on a "trendy" wave right now. There is not a whole lot that keeps you threre. Just in two years, there can be another spot where all the women in world woo abou…

I thought the problem with Pinterest was that "intent to buy" was actually really low compared to other traffic sources.

I know its an old article, but has anything come out contradicting it? http://www.forbes.com/sites/jjcolao/2012/07/13/new-data-show...

Re: Pinterest Completes $200M Funding at $2.5B Valuation

#26

Post by triplesec »

niggler wrote: post #20
goronbjorn wrote: post #18

Earlier quoted context omitted.

$200m is a lot to throw at a company that only has a lot of users . They have little to no revenue at this point and no current revenue streams that point to being able to generate anything worthy of a $2.5b valuation. I guess my point was that I'd like to know what revenue streams they are anticipating creating that would warrant such a high valuation.

That's not how the game works: The investors at this stage still don't care about revenue. The main question is whether or not they can flip the investment to some other firm later (that is to say, will the picture look rosy enough in the future that someone else will buy in at a higher valuation). Revenue starts to matter in the last round before the IPO (if it goes that route). If the sequence ends in an acquisitio…

yeah it's weird, especially since you can't be sure they will make money in the end, but that's how the incestment money works

Re: Pinterest Completes $200M Funding at $2.5B Valuation

#27

Post by mikeryan »

metafour wrote: post #10

I do not understand how the company is being valued at 2.5B. It doesn't look like even the business accounts at Pinterest have any type of fee associated with them. How do they make money? Or is this valuation most likely based on the possibility of making money down the line? EDIT: According to this post, http://news.ycombinator.com/item?id=5254498 , it seems like it is based primarily on potential revenue from data…

Not being snarky but is there a profitable website who's primary source of revenue is based on data mined from their users?

I keep hearing about this "data mining" revenue stream but can't think of a place where its worked. That being said Pinterest seems like one place where it might.

Re: Pinterest Completes $200M Funding at $2.5B Valuation

#28

Post by patrick-james »

BrianEatWorld wrote: post #23
nchuhoai wrote: post #21

I think Pinterest is in a great condition ... at this time. Like they have tons of users who religiously use their product, and it's actually coupled with intent to buy, which makes monetizing easy. However, you can't change the fact, that pinterest is riding on a "trendy" wave right now. There is not a whole lot that keeps you threre. Just in two years, there can be another spot where all the women in world woo abou…

I thought the problem with Pinterest was that "intent to buy" was actually really low compared to other traffic sources. I know its an old article, but has anything come out contradicting it? http://www.forbes.com/sites/jjcolao/2012/07/13/new-data-show...

At this point the data points coming out are almost conjecture. Here's something more recent that says almost the opposite: http://www.entrepreneur.com/article/222740

I know they're also making a new push specifically for brands to be able to manage content and traffic more easily: http://business.pinterest.com/

Given the new focus on businesses and the scale at which Pinterest already operates, the $2.5B isn't so hard to believe.

Re: Pinterest Completes $200M Funding at $2.5B Valuation

#29

Post by fizx »

kb120 wrote: post #13

Can someone shed light on how Pinterest and Instagram can be worth billions? But Reddit is only worth 400m?

A reddit with its present amount of users and no 4chan influence would be worth a billion. Masturbation jokes on the front page scare away advertisers.
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