Hot social startup Pinterest just closed a $100 million financing round at a $1.5 billion.It’s a unique deal: Pinterest didn’t take money from an of the Valley’s big VC firms or other traditional late stage startup investors.
It raised from ecommerce giant Rakuten.
A source familiar with how the deal went down tells that none of the Valley’s normal late stage investors – Sequoia, DST, Kleiner Perkins – even had a shot at the deal.
“None of those guys even got anything. None of those guys got a call. They were all doing crazy inbound and [Pinterest] didn’t really have a conversation with them. [It] had $40 million on balance sheet before this and didn’t really need the money at all.”
Pinterest ended up doing the deal because Rakuten offered more than money. About 70% of Japan uses its ecommerce platform, and it plans to make Pinterest its default wish-list product. Before it would do that, it wanted a piece of the company. Before Pinterest would agree to that, Rakuten had to say it would put up BIG money. It did and the deal happened in about three weeks.
Big VC firm Andreessen Horowitz did get a part of this latest round, re-upping on a pro-rata basis just like the rest of Pinterest’s earlier investors.