Pinterest is a social media platform that doesn’t feature in the news very often. It hasn’t had as much attention from regulators or scandals as Meta (formerly ,Facebook) or TikTok. It’s also not quite as popular Snapchat or any of the above. However, Pinterest enjoys a loyal following of users who engage with it by saving hundreds of images into galleries.
The company has been developed and grown under the radar of investors, who don’t pay as much attention to it. However, the recent deal, which saw Pinterest acquire The Yes company, drew some attention. The Yes is a women’s fashion retail app. So, why this acquisition?
Pinterest – overview
- Pinterest was founded in 2009 in San Francisco Ben Silbermann, Evan Sharp, and Paul Sciarra.
- Started off as a shopping comparison app called Tote, developed by Silbermann’s company Cold Brew Labs.
- Most users were using Tote not just to compare items, but take pictures and send those pictures to themselves. This is how the idea for Pinterest was born.
- 10k users after going into open beta in 2009.
- 11mln unique users per week by December 2011.
- As of Q1 of 2022, YOY revenue for Pinterest hit $575mln.
- $12.54bn valuation as of 22/6/2022, and 18 Acquisitions, including The Yes deal.
- The Yes Deal has been announced in June 2022.
The Yes – overview
- Founded in 2018 by Julie Bornstein and Amit Aggarwal.
- A curated women’s fashion clothing products platform. Personalised recommendations based on users’ preferences.
- 6 months after the launch The Yes users entered over 7 million “Yes” and “No” votes, which fed the platform’s algorithm, and led to further developments.
- Total funding as of 2022 – $30mln.
- A 40-person team will join Pinterest after the transaction is completed.
- As per the deal with Pinterest, July 17th is when the users will no longer be able to make purchases using The Yes funds on theyes.com.
Pinterest’s history of acquisitions
Most big companies keep their cards close to their chest. Determining what will be Microsoft’s or Apple’s next big move can be tricky. However, one can make assumptions in terms of the direction in which the business is planning to go, based on the history of its acquisitions.
Pinterest has previously acquired 17 different companies (excluding The Yes). Here are the latest two mergers:
1. Fleksy – the company and its team were bought out by Pinterest in June 2016. (Pinterest seem to like completing deals in the summer).
Fleksy specialised in…keyboard development. Not the highly technical mechanical keyboards for gamers, but highly customisable keyboards for Android and iOS users. The Fleksy app was then opened up and became open source, while the team joined Pinterest. Reason? Fairly obvious – great engineering talent and making Pinterest easier to use by its customers.
2. Vochi – a video creation and editing app, acquired by Pinterest in December 2021.
In the press release, Bin Liu, Head of Creators Engineering at Pinterest stated: “Our vision is to create a place where Pinners can go from inspiration to realization, and having more creator tools can help us further this vision”.
This signified a clear pivot towards video and more focus on content creators. It was no longer about just making the experience convenient for the users (Fleksy acquisition goal in 2016). But, why?
Why The Yes?
Pinterest’s focus has always been on helping users create pinboards with images as seamless as possible. However, revenue is not driven merely by having cool boards with images (be it recipes, clothes or anything else).
In the last 10 years there has been a clear shift to video and content creators when it comes to users’ shopping habits. Meta’s Instagram has been on the prowl looking for any ways possible to help utilise its huge customer base. Those customers rely on content creators to shop for clothes, food, utilities and so much more.
The rise of TikTok in the past three years underlined the difference in how new generations shop online.
Personalisation of feeds is something that is highly valued by retailers and customers. While Pinterest worked hard on helping users find what they are looking for, it needed something else to raise their game to a new level. The Yes provided the solution to the above and the next step in Pinterest’s evolution. A well curated personalised shopping feed for users will help elevate their experience on the platform and drive more revenue. Simple.
One is the team. Julie Bornstein is a known e-commerce and shopping experience guru. Before starting The Yes she was the COO at Stitch Fix, making a surprise exit to start the new company just before Stitch Fix’s IPO. Looking at the latter’s share price, that may have not been the worst move.
The tech team led by Amit Aggarwal has built a great product in just over three years, and talent doesn’t come cheap. Especially in the Silicon Valley.
While The Yes has its own customer based (undisclosed), it won’t be a significant addition to Pinterest’s own 433 million active monthly users. However, every drop helps of course.
Last, but not least – stifling the competition. “If I buy them, no one else can”. Probably someone at Pinterest. Not a direct quote.
This is a classic case of staying on top of the trends in the industry. In the case of Pinterest and The Yes it is building out the product to keep the online shoppers satisfied. Whether it is timely and what results it will yield short-/long-term – remains to be seen.
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