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Pinterest joins the billion dollar club: Gets $100M in round led by Rakuten

Pinterest funding

Pinterest fundingAfter Facebook’s surprising Instagram buy, it now seems like every hot startup needs to reach a billion dollar valuation to truly be taken seriously. So it was inevitable that Pinterest, the popular image pinboard site, would eventually skyrocket in value.

Japanese web retailer Rakuten announced today that it’s leading a $100 million round in Pinterest, with participation from Andreessen Horowitz, Bessemer Venture Partners, and FirstMark Capital, along with several angel investors. The deal reportedly values the company at around $1.5 billion, according to All Things Digital (which caught wind of the news last night).

Pinterest, which lets users create boards of images related to their interests, has become a darling of e-commerce. The company is sending big traffic to online retailers, and it also drives more revenue per click than Twitter or Facebook,

“While some may see e-commerce as a straightforward vending machine-like experience, we believe it is a living process where both retailers and consumers can communicate, discover, and curate to make the experience more entertaining,” said Rakuten CEO Hiroshi Mikitani in a statement today. “We see tremendous synergies between Pinterest’s vision and Rakuten’s model for e-commerce. Rakuten looks forward to introducing Pinterest to the Japanese market as well as other markets around the world.”

Rakuten is no stranger to big investments in Western companies. It purchased e-book reader company Kobo for $315 million last fall, and e-commerce site Buy.com in 2010 for $250 million. The company put in over $50 million of the Pinterest round, All Things D reports.

When asked by the Financial Times what the site will offer to Rakuten’s stores, Mikitani said, “Search is still the main driver or us. We are always looking to make our site more interesting. Pinterest is a little bit different from Facebook. Pinterest is more targeted. They use beautiful graphics very effectively to create interest circles. They are extremely good at it. Because of that, the traffic coming from Pinterest probably will have a very high conversion rate. That is why I think they are very good at this discovery shopping.”

Palo Alto, Calif.-based Pinterest was founded in 2008, and previously raised around $40 million in funding.