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Pinterest Raises $200 Million at $5 Billion Valuation

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May 16 (Bloomberg) -- Pinterest Inc. raised $200 million in a funding round that gives the Web-scrapbooking startup a $5 billion valuation, up from $3.8 billion seven months ago.

The money came from existing investors, including SV Angel, Bessemer Venture Partners, Fidelity Investments, Andreessen Horowitz, FirstMark Capital and Valiant Capital Partners. The new round brings the total raised to $764 million, Pinterest said in an e-mailed statement yesterday.

The funding for Pinterest, which has yet to start generating significant sales, is part of a spate of fundraisings at multibillion-dollar valuations. Uber Inc. is in talks to raise funds at a valuation of $10 billion or more, according to people familiar with the talks, while room-sharing service Airbnb Inc. and online-storage service Dropbox Inc. were valued at $10 billion in their latest fundraising rounds.

“Pinterest has a vision of solving discovery and helping everyone find things they’ll love,” Chief Executive Officer Ben Silbermann said in the statement. “This new investment gives us additional resources to realize our vision.”

The financing will help fund an expansion for the website, which began implementing a plan to generate revenue from advertising this week. San Francisco-based Pinterest is seeking to add users internationally and develop its ad program further, and will also improve the product so that it’s easier for people to find what they’re looking for on the site.

In October, Pinterest said it had raised $225 million at a valuation of $3.8 billion. In February 2013, the company was valued at $2.5 billion. By comparison, Groupon Inc. is worth $4.13 billion and Yelp Inc. is worth $3.95 billion.

Investment Activity

Venture capital investment is at its highest level since 2001 and startups are seeing their highest median valuation increases since at least 2004, according to a survey of first-quarter deals by Fenwick & West LLP, a Silicon Valley law firm. Companies have more leverage with investors in deals, and the number of venture-backed firms pursuing initial public offerings is the highest since 2000, according to the survey.

Pinterest’s latest investment round and valuation were reported earlier yesterday by ReadWrite. Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz.

To contact the reporter on this story: Sarah Frier in San Francisco at sfrier1@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson

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