Another day, another IPO. The social discovery app Pinterest has gone public and priced its shares at $19 each. It sold over $1.6 billion in shares to several big investors, driving up its market capitalization to reach a whopping $12.7 billion.
Pinterest is a social media website that allows users to share and pin images found on the web to different boards on the website. Its users — known as ‘pinners’ plan events, create albums, share their work, and explore their interests.
Following its launch in 2010, Pinterest quickly became a hub for infographics, tutorials, and advice. Its fair algorithms allow everyone the chance to have their work seen while ensuring its users only see content that is genuinely relevant. In under a decade, Pinterest has risen to become the fourth most popular social media site in the world, just behind Facebook, Twitter and LinkedIn, with a mostly female userbase.
At this valuation, Pinterest is close in scale to Ethereum (ETH), which currently has a market capitalization of just over $18 billion. If this is broken down to a per-user valuation, each of Pinterest’s 250 million users contributes $72 worth of value to the company, whereas Ethereum’s 1.2 million users each contribute $15,000 to the valuation of Ethereum.
How Crypto ICOs Compare
Since mid-2014, Initial Coin Offerings (ICOs) have become a popular fundraising mechanism for blockchain projects looking to gauge public interest and accelerate the development of their products. The first of these ICOs occurred in 2013 when Mastercoin (now OMNI) successfully raised $500,000.
Now, modern ICOs regularly raise upwards of $10 million, while several projects, including Tezos (XTZ), Huobi (HT) and Dragon Coin (DRG) have successfully raised over $200 million. EOS raised more than $4 billion in a year-long ICO in the largest offering to date.With many blockchain projects now approaching a respectable size, do you think any are ready to try for an IPO? Click To Tweet
Move Over ICOs
The average size of ICO funding has diminished significantly since 2017, with projects looking to raise $7 million on average. On the other hand, most IPOs tend to place the company valuation well in excess of $100 million, with Pinterest’s IPO being on the larger side.
Unlike IPOs, ICOs usually do not launch with a working product in-hand, and instead, use the funds gathered to develop the project’s vision normally outlined in the whitepaper.
Because of these, ICOs can typically be considered riskier investments in new and developing companies. IPOs offer investors shares in an already well-established company and giving it a cash injection which can be used for further expansion and development.
Now, several blockchain projects appear to be planning to go the IPO route, with Bitcoin mining giants Bitmain and Bitfury both planned to go public in 2019.
Beyond this, with many ICO-founded projects now picking up considerable support and momentum, it appears to be only a matter of time before some of these projects mature enough to consider an IPO.
Do you think any blockchain-based companies could benefit from an IPO? If so, which? Let us know your thoughts in the comments below!
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