• by Erik Sass , Staff Writer, October 24, 2013

Pinterest’s business model and advertising strategy may still be works in progress, but the image-based social network’s basic value and growth potential are clear enough to investors who ponied up $225 million in Series E funding this week, valuing the company at $3.8 billion.

This round of funding was led by Fidelity with additional contributions from previous investors including Andreessen Horowitz, Bessemer Venture Partners, FirstMark Capital, and Valiant Capital Partners, and brings the total sum raised by Pinterest so far to $564 million.

According to industry reports some of the new funding will go towards expanding Pinterest’s mobile presence, a must-have for any social network with hopes of continued growth. Mobile already accounts for around three quarters of Pinterest’s traffic, and I can only imagine that proportion is going to increase in coming years.

As of September Pinterest had around 25 million unique users in the U.S., up from 11.7 million in January 2012, putting it on the small-ish side for a social network -- but that is only desktop users, not mobile, and anyway everything looks small compared to Facebook’s billion+ users. Globally Pinterest has around 70 million desktop users, up from 50 million in February of this year, so it’s still growing nicely.

On the business side Pinterest is currently testing ad units that use “paid pins” to achieve an organic integration with the user experience, as well as e-commerce integrations like a service that delivers automatic price alerts when the price of a user’s pinned products goes down.

One issue that still interests me is whether Pinterest’s gender dynamic is going to change: by most accounts the network is still at least 70% female by membership and traffic, and the proportion may be even higher. While most social networks like to appeal to both genders for simple reasons of scale, it seems to me there could be equal or greater value in targeting one gender and really “owning” the online social space for women’s interests, especially when there is so much obvious potential for e-commerce and advertising.