Pinterest sets IPO terms at a valuation $1bn less than expected

The online scrapbooking site reveals plans to sell shares at between $15–$17 as experts worry the lower-than-expected valuation marks the end of substantial investment in tech startups

8Apr

Pinterest plans to sell 75 million shares at between $15–$17 each to raise as much as $1.3bn from investors at a valuation of up to $11.3bn, the online scrapbooking site revealed in a regulatory filing for its long-awaited initial public offering (IPO). The new figures place Pinterest at $1bn below the most recent valuation it received from private market investors of $12.3bn.

Pinterest is one of the many mature startups that is planning to go to IPO this year. Last week, Slack revealed plans to go public with a direct stock listing while Lyft went to IPO with shares priced at $72 late last month, although it was a bumpy start as the ride-hailing company has since seen its stock price fluctuate. Uber and Zoom are expected to make similar announcements over the coming months.

Some experts have been quick to take note of the lower-than-expected valuation of Pinterest, suggesting that it could mark the end of an era which has seen heavy investment in tech startups. According to the Financial Times, "the deal could be an ominous sign for Wall Street's interest in new tech listings", warning that this could impact the upcoming IPOs.

The San Francisco-based company was founded in 2010 and two of its co-founders, Ben Silbermann and Evan Sharp, will be granted restricted stock units worth around $39.7m each, vesting over five years, according to the filing. Paul Sciarra, another Pinterest co-founder who left the company in 2012, also still holds $720.9m worth of stock.

Pinterest has a number of venture backers, most significantly Bessemer Venture Partners who first invested in the company back in 2011 when the company was worth $40m. Its stake is now around $1bn, according to the proposed share price. 

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