Recode | Pinterest is growing, but not as fast as Twitter or Snap were when they filed their IPOs

Pinterest just filed for its IPO, and the big question will be whether it's a social media company, an e-commerce company, or a search company.

Pinterest's business is growing steadily, but not at the same clip as other big advertising-driven tech IPOs from the past decade. According to new IPO paperwork filed Friday that offered the most detailed look yet at Pinterest's business, Facebook, Twitter, and Snap were all showing faster pre-IPO growth.

Pinterest reported revenue of roughly $756 million in 2018, growth of 59 percent from the year before. Pinterest's 2017 revenue of roughly $473 million also represented 58 percent growth over the year prior.

That's not bad, but it's also not the kind of hyper growth we've seen from other advertising-driven tech businesses at the time of IPO. Pinterest is not just a social network or a communication business, but it is a consumer app that makes all of its money from advertising. That means it competes for ad dollars with places like Facebook, Twitter, and Snap, so it's no surprise Pinterest also listed all three companies as competitors in its S-1 paperwork.

Twitter's business nearly tripled in the full year before its IPO, and Facebook's nearly doubled. Snap's business, meanwhile, grew by almost 600 percent in the year before it filed IPO paperwork.

How big were these advertising businesses the full year before their respective IPOs?

• Twitter — $317 million in 2012, growth of 198 percent
• Facebook — $3.7 billion in 2011, growth of 88 percent
• Snap — $404.5 million in 2017, growth of 597 percent over the previous year

In both Twitter and Snap's case, the businesses were smaller than Pinterest's is. But that kind of crazy year-over-year growth also gave a sense that they were far from slowing down. (We would learn later — in both cases — that wasn't actually true.)

Pinterest, though, has shown some steady revenue growth, which may not be as sexy as the classic Silicon Valley hockey-stick growth, but it may prove more reliable.

Net losses have been decreasing over the last three years, but the company is still not profitable. The picture, though, is improving: Losses came in at $60 million in 2018, about a third of its losses from three years ago.

Pinterest is also using a controversial, even if increasingly common, dual-class stock structure that will allow its founders to maintain control even as it transitions to a public company. To defenders, that set-up helps insulate a company from unruly activist investors and protects a founder's long-term vision. To critics, that can lead to unaccountability and can therefore dissuade investors from buying shares.

Existing shareholders in Pinterest will hold Class B stock, which will have 20 times as much voting power as those who are new to the company. That's a huge discrepancy. It's the same uneven ratio that an expert called "pretty egregious" when it was unsealed at Lyft, but a key difference here is that it's not just the company's co-founders that will hold the special stock, but all shareholders.

Perhaps the biggest question about Pinterest over the years has been: What is it? Is it a commerce company? Is it a search company? Is it a social company? The distinction matters because it gives people a point of reference in valuing the business. Pinterest, for example, has pushed back on the idea that it's a social company, perhaps in part to avoid comparisons to Facebook, the same comparisons that have been troubling for Twitter and Snapchat. (Though as consumer apps predominantly relying on advertising revenue, some comparisons are warranted.)

But understanding what Pinterest is also helps set expectations around what Pinterest will build and who they'll work with. Today, Pinterest describes itself as a "visual search" company, where the main business pitch to potential advertisers is that people visit the site for inspiration. If you're planning a wedding or a home remodel, then Pinterest might be a great tool for you — and what better time for advertisers to reach a potential customer than when they are considering a major life change?

Another challenge Pinterest has confronted is the belief that the company is overvalued. The company notched close to its current valuation at one of the frothiest times in venture capital: in 2015 at about $10 billion. But Pinterest's valuation barely jumped between 2015 and 2017, lending credence to the idea that the market found Pinterest as not quite earning its mega-valuation — last measured at about $12 billion two years ago.

But if there's any good time for a startup to file and try and avoid a downround IPO, it's now. The IPO market of 2019 is expected to be the busiest in at least a decade, with listings en route from Uber, Lyft, and Slack. Amid worries that a recession could arrive in late 2019 or early 2020, some bankers and other IPO advisers have been encouraging clients to accelerate listing plans to avoid a broader stock sell-off.

Pinterest was initially targeting an IPO closer to the middle of the year, but appears to be heeding advice to move quickly.

Major shareholders include Bessemer Venture Partners, Andreessen Horowitz, and FirstMark Capital, each of which own more than 5 percent of the company. The filing didn't disclose the ownership percentage of Ben Silbermann, the company's CEO.