As social networking looks for new avenues to entice people and keep them hooked, Pinterest has raised a whopping $150 million in venture funding to help in its global expansion efforts and fund its visual search engine. The company raised this funding at the same share price as two years ago in April 2015 when it was valued at $11 billion. The increase in valuation is largely due to issuance of stock by the company to its employees as compensation.
There are currently about 175 million people using Pinterest to search for and post pictures that are related to fashion, travel, cooking, and other interests.
Pinterest says it will use the current influx of funds to improve its computer vision and visual search technology, notably Lens, its camera search that allows users to take a photo on their phone and see if they can find similar items or images on Pinterest.
Image recognition is a burgeoning arena, one where larger tech giants are fighting out a different battle. For consumers, this will be a move that bridges the gap between reality and discovery on the web. Pinterest has complete insight into the behaviour of its users as well as the opportunity to enter the consumer buying cycle at the right time. This is something that is bound to attract advertisers n the near future.
According to the company, mobile search has increased by over 40% on the platform and the revenue generated from each search query has doubled since the start of this year. The company has found that 60% of its users come from outside of the US. Pinterest’s focus is also on improving the relevancy of native advertisements that users see on the platform. Marketers are expected to spend $12.82 billion on digital-video ads in 2018, up from $7.7 billion last year.
Pinterest CEO Ben Silbermann recently said,
Everything on Pinterest is visual. That’s the thing about a good idea, you know it when you see it. Visual discovery is all about the tools to find the ideas that are your taste and your style
Pinterest can now offer advertisers a unique proposition, where a click on an advertisement on the platform almost guarantees a conversion, either in terms of a sale or a download, because products are shown to users at the exact moment they discover something new.
The company generates its revenue by selling ads that look like posts on its website. It is currently targeting a revenue of over $500 million by the end of this year after having made $3oo million in the previous year. And while most brands spend large amounts of money to advertise on Facebook and Google, Pinterest has had to bring in the big guns to show it can have a different ad product that can generate revenue in billions.
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