Sources: Pinterest is planning an IPO that could come at a $12B+ valuation as soon as April 2019; the company is on track for $700M+ revenue in 2018, up 50% YoY
Maureen Farrell / Wall Street Journal :
Context & Ripple Effects
Pinterest's path to the public markets has been two years in the making: after falling short of its projected $500M in 2017, the company reaccelerated to 58% growth on $473M of revenue and nearly 250M monthly users, then set an explicit mid-2019 IPO target while approaching ~$1B in annual ad sales. February brought the confidential filing seeking at least $12B.
This report firms up the timeline — April 2019 at a $12B+ valuation — and lands just before the market rendered its verdict: Pinterest ultimately set its price range at $15-$17 per share, topping out at $11.3B, below the $12.3B mark from its last private raise. The tension between those two numbers is the real story.
First-order effects
- Pinterest employees and early investors get a concrete liquidity window as soon as April, with the company entering the roadshow armed with $700M+ in 2018 revenue growing 50% YoY.
- Underwriters must reconcile a $12B+ ask against the $11.3B top-of-range the market eventually accepted — a haircut for anyone who bought into the last private round at $12.3B.
Second-order effects
- A public debut priced below the final private mark forces Pinterest's later-stage backers to mark down their positions, raising the bar for how other pre-IPO consumer internet companies can defend their own private valuations.
- With ~$1B in ad sales run-rate, Pinterest enters direct competition for brand-ad budgets against larger social platforms, and its disclosed growth rate becomes the benchmark rivals' ad businesses will be measured against.
Third-order effects
- If the pattern holds — strong-growth ad platforms listing beneath their last private rounds — the 2018-2019 vintage of mega-unicorns faces a structural reset in which public markets, not private investors, set terminal value for consumer internet names.
The trend: Late-stage consumer internet companies are testing whether public markets will honor private valuations, with Pinterest's sub-$12B pricing a data point in the repricing of the unicorn era.