In start-up bubble, $4 billion is the new $1 billion
Pinterest just wrapped up a gargantuan round of funding, $225 million, that values the company at $3.8 billion. For that, Pinterest offers not even a single dollar of revenue, at least not yet. But it has a plan for world domination, and that’s all that matters.
When Monsanto bought agricultural algorithm start-up Climate Corp.—founded by Google engineers—for $930 million recently, you could almost hear the screams in Silicon Valley for leaving $70 million on the table and ruining a sure billion-dollar thing for everybody else. It seems the billion-dollar payday given the likes of Instagram, Tumblr and Waze is downright cheap in the app arms race.
Pinterest’s latest round was almost double its valuation in a fundraising earlier this year, but at least it’s not like investors with a low risk tolerance are exposed to this type of bet: The lead investor was Fidelity Investments, one of the biggest managers of individual investor retirement assets in the U.S.
Source: Eric Rosenbaum, CNBC.com