May 17, 2012, 9:56 AM

Japanese e-commerce company Rakuten invests in Pinterest

The image-sharing social network raises $100 million in a funding round.

Zak Stambor

Managing Editor

Lead Photo

Fledgling social network Pinterest has raised $100 million in a funding round led by Japan-based e-commerce operator Rakuten Inc. Existing investors Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital also took part.

The funds will enable Pinterest to expand internationally into Japan and the 17 other markets in which Rakuten operates. Rakuten owns, which it bought in 2010. It also owns stakes in Germany-based Tradoria GmbH and Ikeda, which sells e-commerce technology and services to several large online retailers in Brazil.

"We see a lot of synergies between Pinterest and Rakuten's companies," says Neel Grover, CEO and president. "All of our properties can work with Pinterest in some fashion."

Among those properties are affiliate network Rakuten LinkShare, which means that the Japanese e-commerce company could help Pinterest generate revenue from its strong traffic and user growth via an affiliate network.

Pinterest, which was launched less than two years ago by Cold Brew Labs Inc., enables users to ‘Pin’ things on the web that they like, such as a recipe or a photo of a piece of jewelry. Those Pins are then gathered together on the user’s Board, which she can organize and share with friends. Consumers can follow other shoppers on the social network, which enables them to see each others’ Boards; that also can help consumers discover brands or products.

The social network has seen a surge in its traffic this year and recent reports have shown that Pinterest helps drive shoppers to make purchases. More than 17.8 million consumers visited fledgling social network Pinterest in February, a 52.1% jump from 11.7 million visitors in January, which makes it one of the fastest-growing sites in the United States, according to web measurement firm comScore Inc.

The investment suggests that Pinterest working out its business model, says Sucharita Mulpuru, Forrester Research Inc. vice president and principal analyst for e-business. “It definitely reinforces the notion of Pinterest having an interest in figuring out how to monetize itself,” she says.


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