Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
The funding round values the social network at $5 billion and comes on the heels of Pinterest announcing tests of its first ad units with several online retailers.
Even though Pinterest has yet to figure out how to generate revenue from its large user base, the image-focused social network has raised $200 million in a Series F funding round that values the company at $5 billion.
Pinterest is the 12th most-visited site in the United States, according to Alexa Internet Inc., a subsidiary of Amazon.com Inc., and the average visitor spends more than 7 minutes and 13 seconds per visit on the site.
Existing investors SV Angel, Bessemer Venture Partners, Fidelity, Andreessen Horowitz, FirstMark Capital and Valiant Capital Partners took part in the funding round.
“Pinterest has a vision of solving discovery and helping everyone find things they'll love,” says Ben Silbermann, the social network’s co-founder and CEO. “This new investment gives us additional resources to realize our vision.”
The social network says it plans to use the funds to hire additional staff to help make Pinterest a “discovery platform,” where consumers can find products they may not have encountered before. To that end, the company recently released a mobile-focused search engine called Guided Search. Pinterest, which is available in 31 countries, says it also plans to grow its user base, in part, by expanding into new international markets.
Pinterest is also trying to figure out how to generate revenue from those users. Pinterest is the midst of testing its first ad units. The social network says it is working with online retailers such as Banana Republic, LuLuLemon Athletica Inc. and Target Corp., as well as brands such as Ziploc, to test how its users react to its “Promoted Pins” ad unit appearing in search results and category feeds. Before launching advertising, Pinterest says it wants to ensure that the ads are “tasteful, transparent” and “relevant” to its users.
The social network has raised $764 million to date.