Pinterest to file for IPO amid wave of Silicon Valley filings

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Pinterest goes public
Image: Pinterest

Those who have been paying attention to the stock exchanges recently may have noticed an interesting pattern. A wave of Silicon Valley companies is getting ready to file their initial public offerings (IPO) in 2019. The anticipated influx of cash to the area following these offerings is likely to cause a ripple effect in the entire tech industry.

Pinterest, a San Francisco-based social community and image “pinning” site, plans to join the fray.

Not Profitable…Yet

Somewhat surprisingly given Pinterest’s widespread popularity, the company is yet to have a profitable year.

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But thanks to a unique business model and CEO and co-founder Ben Silbermann, things are starting to turn around. An IPO on the New York Stock Exchange may be just the catalyst needed to help the company make money.

Pinterest claims it pulled in $750 million in revenue last year and cut losses from $200 million in 2016 to $63 million in 2018. The nine-year-old company makes money primarily through advertising to its 250 million active monthly users.

The firm closed out 2018 with a profitable quarter but couldn’t outpace losses from the rest of the year. Still, that quarter seems like a sign of good times to come.

Bigger Impact than a Social Network

Pinterest seems to pride itself on the fact that it is not a social network.

Instead, they compare themselves to tools like Google while still retaining media-like qualities in their IPO filing. “It’s a media-rich utility that satisfies both emotional and functional needs by solving a widespread consumer problem that is unaddressed by many other platforms. We call it discovery.”

As a robust image-sharing network, Pinterest lets brands sell their wares via targeted search engine advertising. When users look for new pictures to pin to their boards, they stumble upon products that align with their interests.

Joining the site in its search for public funding are ride-hailing companies Uber and Lyft, popular rental service Airbnb, business communications platform Slack, and food delivery service Postmates.

All of these companies are based in the greater Silicon Valley area and experts believe these back-to-back IPOs may drastically reshape the region.

Surely, millions of dollars suddenly changing hands will send reverberations throughout the tech world. Thanks to Pinterest and others leading the way by going public, the potential for new startups to take off will be higher than ever. Additionally, the stock market may benefit from Silicon Valley’s resurgence.

Ultimately, we’ll have to wait and see how these developments affect the technology space as a whole. But right now the excitement consumers and entrepreneurs feel about tech’s future is palpable.