How much was instagram sold for
Money doesn't make you happy
Instagram co-founders Mike Krieger (L) and Kevin Systrom at the 2019 SXSW Conference and Festival at the Austin Convention Center on March 11, 2019 in Austin, Texas.
Jim Bennett | WireImage | Getty Images
Kevin Systrom and Mike Krieger have lived every entrepreneur's dream.
They launched Instagram on the app store at midnight on Oct. 6, 2010. On April 9, 2012, Facebook announced it was acquiring the company for a deal valued at $1 billion.
Virtually overnight, Systrom and Krieger became very, very wealthy.
But Systrom, who with Krieger left Facebook in September, says the experience was eye-opening in ways one might not expect.
"I think the biggest lesson ... coming into a fair amount of money pretty quickly, was that money itself is no end. It doesn't make you happy. It doesn't solve health problems. It can help in those things," Systrom told TechCrunch's Josh Constine at the South by Southwest conference in Austin, Texas, on Monday.
"Maybe the first day you wake up and you are like, 'Yeah, this is great.' But that goes away pretty quickly," Systrom said. "I don't really wake up in the morning and look at the bank account." It's a benefit, Constine noted, of having a large account.
The first thing Krieger did after making the deal with Facebook — was to get a burger.
"I distinctly remember — and I don't know if most people do this — but I think I craved comfort. It's a crazy decision we have been like talking about it for a couple of really intense days, and I went home to [now-wife] Kaitlyn and was like, 'Let's go to Nopa and get their burger.' It's my favorite burger in San Francisco. This is the most normal thing I can imagine doing."
Practically, the money from the deal doesn't instantly drop into your bank account, Krieger pointed out. And tactically, he and Systrom were both careful to not make any rash changes to their lives for the first couple of years after they sold Instagram.
"There is no way of processing it.
And it probably took years for us to fully process it," Krieger said Monday. "I think it is very easy to upend your whole life but instead it is like, we are still the same people."
A mentor of Systrom's had warned him that money doesn't solve many of the hardships that come from being human.
"No matter where you are on the spectrum, you struggle in different ways," Systrom recalled being told.
"What ends up mattering — and one of my mentors likes to say — is is your struggle meaningful? Do you wake up in the morning everyday struggling on things that feel like they mean something to you, like they are to some end? And most of Instagram wasn't about how much money we made. It was waking up every single morning, working with awesome people, some of our best friends still to this day were Instagram employees because we met them there, we were in the trenches with them, working on something that we believed. And that's honestly the thing that got us up every morning, working hard at Instagram.
It wasn't about the money."
See also:
Sam Adams founder: Unless you're a sociopath, being happy is better than being rich
How a cheap plastic camera on a trip to Italy inspired Instagram, according to co-founder Kevin Systrom
Warren Buffett on wealth inequality: 'A rich family' takes care of its own and the US should too
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Top 5 Companies Owned by Facebook (Meta)
Meta Inc. (META), the company which owns Facebook, the world's largest social networking website, was founded by CEO Mark Zuckerberg and several Harvard College roommates in 2004. The company's name initially was FaceMash, which was changed to TheFacebook, eventually dropping "The" from its name to become Facebook, before being changed yet again to Meta in Oct. 2021. Zuckerberg and his co-founders initially launched the service for their Harvard classmates, quickly expanding it to other universities and then to the general public.
The company since then has grown into a global giant with 2.8 billion users and a market cap of $926.8 billion. The company reported FY 2020 net income of $29.1 billion on $84.1 billion in revenue, nearly all of which came from advertising.
Meta has expanded far beyond its original social networking platform since its founding 16 years ago. Its products also include messenger services, photo and video sharing, augmented reality, and many other apps and services. Acquisitions have been key to growing these businesses and Meta's revenue in general. Meta's strategy has been to buy potential rivals before they can get too big. In the process, the company sometimes has paid exceptionally high prices for some deals. The company has also drawn attention from the Federal Trade Commission (FTC) due to potential anticompetitive practices, with the FTC recently demanding data on unreported purchases from Meta as well as other big tech companies.
Below, we look in more detail at Meta's 5 biggest acquisitions.
The company does not provide a breakdown of how much profit or revenue each acquisition currently contributes to Meta.
- Type of Business: Photo and video-sharing app
- Acquisition Cost: $1.0 billion
- Acquisition Date: April 9, 2012
Instagram is a photo and video-sharing social networking platform that was launched in 2010. Through the Instagram app, users can upload, edit, and tag photos and videos. The company remained independent up until it was acquired by Meta for $1.0 billion in 2012. While Meta bought Instagram as the photo-sharing company was garnering significant attention from venture capital firms and other investors. Some estimates indicate that Instagram generates more advertising revenue than its parent company.
When it acquired Instagram, Meta opted to build and grow the Instagram app independently from Meta's main Facebook platform; Instagram remains a separate platform to this day. The price that Meta paid for Instagram, which at that time was generating no revenue, reflects Meta's willingness to pay a premium for young companies.
- Type of Business: Mobile messenger service
- Acquisition Cost: $19.0 billion
- Acquisition Date: February 19, 2014
WhatsApp is a messenger and calling service available to users throughout the world. The platform was launched in 2009 as a low-cost alternative to standard text messaging services. Throughout much of its history, WhatsApp has allowed users to send messages and make calls directly to other users for no cost, regardless of location. Users can also send photos, videos, and documents over the platform. Meta bought WhatsApp at a time when the smaller company boasted more than 400 million active monthly users, making it a fast-growing potential rival to the Facebook network platform.
When Meta purchased WhatsApp, it was an independent company that had recently been valued at $1.5 billion. Although it is unclear exactly how much revenue WhatsApp generates, some estimates are that WhatsApp revenue will be as high as $5 billion by 2020.
Oculus VR
- Type of Business: Virtual reality technology company
- Acquisition Cost: $2.0 billion
- Acquisition Date: March 25, 2014
Just weeks after announcing its acquisition of WhatsApp, Meta followed up by buying virtual reality hardware and software company Oculus VR. This company was founded in 2012 and is best known for its Oculus Rift product, a virtual reality headset that was designed for video gaming. Since Facebook's purchase of Oculus VR in 2014, the subsidiary has made multiple acquisitions of its own. Perhaps the most prominent was the 2015 purchase of Surreal Vision, a company specializing in 3D scene mapping reconstruction.
At the time that Meta acquired Oculus VR, the company had only produced a development prototype of what would become its popular headset product. Meta's purchase of Oculus VR gave it an instant presence in the virtual reality market at a time when developers were showing growing interest in VR.
Onavo
- Type of Business: Mobile web analytics
- Acquisition Cost: $100–200 million (estimated)
- Acquisition Date: October 2013
Founded in 2010, Israeli company Onavo performs web analytics on other mobile apps to determine customer usage. Meta acquired Onavo in October 2013 for an undisclosed amount that some analysts estimated to be between $100 million and $200 million. At the time of the acquisition, Onavo was an independent company. Although Onavo is not one of Meta's largest acquisitions, Onavo's technology may have allowed Meta to make crucial early determinations about other companies and apps to acquire. Onavo has occasionally been classified as spyware, forcing Meta to pull Onavo from both the iOS and Android app stores in the face of criticism.
Beluga
- Type of Business: Messaging service
- Acquisition Cost: Undisclosed
- Acquisition Date: March 2, 2011
Messaging app service Beluga, founded in 2010, was acquired by Meta a year later.
Meta bought Beluga in the midst of the startup's fundraising process for an undisclosed sum. In buying Beluga, Facebook acquired the technology that eventually became the social media company's highly successful Messenger platform. In the process, Meta again expanded its offerings and eliminated a potential rival.
Facebook Diversity & Inclusiveness Transparency
As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of Meta's commitment to diversity, inclusiveness, and social responsibility. The below chart illustrates how Meta reports the diversity of its management and workforce. This shows if Meta discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall, across a variety of markers. We have indicated that transparency with a ✔.
| Meta Diversity & Inclusiveness Reporting | |||||
|---|---|---|---|---|---|
| Race | Gender | Ability | Veteran Status | Sexual Orientation | |
| Board of Directors | |||||
| C-Suite | |||||
| General Management | ✔ (U. S. Only) | ✔ | |||
| Employees | ✔ (U.S. Only) | ✔ | |||
More than 890 million people open Instagram every day. Among them are ordinary users, celebrities, professionals and businessmen. For many, the network has become not just a platform for communication, but a tool for brand promotion. How much did the creators earn from their invention?
What is Instagram
Instagram was originally developed as a mobile application for sharing photos and videos, but with its growing popularity, it has acquired all the "chips" of a full-fledged social network.
The base of registered users of the service, according to RBC, reached 1.1 billion people in mid-June 2018. According to a study conducted by We Are Social and Hootsuite, the number of people who use Instagram daily at the beginning of 2019 was almost 89.5 million people.
Instagram is not an independent company - it exists just as a service. In April 2012, it was bought by Mark Zuckerberg's Facebook company. The current owner of Instagram paid about 1 billion USD for its acquisition.
Source: allbrands.markets
Zuckerberg owns more than 50% of the voting rights on Facebook. In addition, he holds the position of CEO and Chairman of the Board of Directors.
About the Creators of
Instagram is run by two people, Kevin Systrom and Mike Krieger.
Kevin Systrom graduated from Stanford University with a BA in Science and Technology Management. Kevin started as a programmer at Odeon, where he was selected for an internship among university scholarships.
This company later evolved into Twitter. Systrom then worked for Google Marketing where he helped develop Gmail and Google Reader.
Mike Krieger graduated from Stanford with a master's degree. Prior to joining the Instagram project, he worked for Meebo as a UI designer and Frontend developer.
Instagram: start
Photo: Krieger and Systrom. Source: Krieger's Instagram page
The future creators of the popular service worked together on the Burbn project. It was a geolocation network with the ability to process photos. Even then, they realized that people like the idea of sharing moments of their lives through photos.
In 2010, it was decided to collect all the photo processing features from Burbn and make a standalone application. It's called Instagram. At the beginning of October 2011, the developers placed it in the App Store, and it quickly became very popular. Already in the first year of its existence, Apple named Instagram the best application for the iPhone - techli.
com writes about this.
In 2011, the second version of the application appeared. Its feature is additional photo processing options - new filters, quick rotation, changing the angle of inclination. However, Instagram was still only available to iOS users.
The Android version appeared in 2012. As Kevin Systrom said then in an interview with The New York Times, after the advent of Instagram on Google Play, about 2 thousand people registered every minute.
Purchased by Facebook
Facebook announced its intention to acquire Instagram in April 2012. Systrom and Krieger were to receive $300 million in cash and 23 million Facebook shares. According to the terms of the agreement, the latter was obliged to pay a penalty in the amount of 200 million USD in case of failure of the transaction. However, everything went well, and Instagram became a division of Facebook.
The founders stayed in the project for a long time. Kevin Systrom was the chief executive of the service, while Michael Krieger led the engineering department.
They both left the company in 2018.
The RBC portal then wrote, citing the New York Times, that the founders had decided to leave due to the Facebook crisis. It flared up due to criticism of the social network for incorrect handling of user data.
Photo: Zuckerberg with Macron. Source: Mark's Instagram page
There is another point of view. According to Bloomberg, the creators of Instagram left the project due to disagreements with Mark Zuckerberg about the future of the service. The agency reported that the leader of Facebook began to show increased attention to the service. However, according to the agreements between him and the developers, they should be given complete freedom of action.
How much does Instagram cost?
So, the smartphone app has brought hundreds of millions of dollars to its developers. But was this purchase beneficial for Facebook? The acquisition of the service was a major deal for the social network, since at that time it spent no more than 100 million USD on acquisitions.
However, after that, Instagram managed to grow significantly. Facebook does not disclose information about the profits that individual divisions bring to it, including Instagram. But back in 2015, analysts at Bank of America Merrill Lynch (now Bank of America) estimated its value at $37 billion. Also, according to their calculations, the service could earn about 4 billion USD in revenue annually from advertising.
In 2016, according to Forbes, Instagram could already be worth up to 50 billion USD. Bloomberg in mid-2018 estimated the annual profit of the service at 10 billion USD, and the total cost at 100 billion USD.
Photo: pixabay./usa-reiseblogger
Will the service become independent
In May 2019, there were rumors about a possible separation of Instagram. The Russian newspaper then wrote that Mark Zuckerberg was urged to do this by Chris Hughes, one of the co-founders of Facebook. He proposed to break the company into 3 separate parts - the actual social network, the WhatsApp messenger and Instagram.
Hughes cited Facebook's monopolization and the fact that Zuckerberg, as its leader, can influence private opinion as the reason. Earlier, the social network was accused of influencing the results of the US presidential election through selective display of campaign materials.
However, according to Interfax, Zuckerberg refused to take such a step. He acknowledged that Facebook has problems, including in terms of information security. But fragmentation, in his opinion, is impossible and pointless. Thus, he denied rumors that Instagram could soon become an independent company.
Zuckerberg bought Instagram for $1 billion. Today he is worth tens of billions – AIN.UA
April 10, 2017, 09:00
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Exactly five years ago, Mark Zuckerberg announced his first high-profile purchase. The social network Facebook acquired the Instagram service for $1 billion: they paid in cash and shares, which then fell in price and the deal was later estimated at $715 million.
For Facebook, which had previously spent less than a hundred million dollars on acquisitions, this was huge news.
In 2012, Instagram was quite small, although it was considered popular. About 30 million installs on the iPhone, no version for Android, earnings on filters for processing photos. “We will use all the resources of Facebook - financial and personnel - for the rapid development of the platform,” Kevin Systrom, head of Instagram, said at the time. It was an important deal for him: the service made a successful pivot, managed to raise $50 million and the valuation rose to $500 million. The $1 billion sale allowed all 14 employees to become millionaires in an instant.
But Mark Zuckerberg ended up with even more. Over the next 5 years, Instagram has grown to a phenomenal 600 million active users - that's 2 times more than Twitter users and almost 4 times Snapchat. Moreover, the last hundred was added in just a year. Instagram has connected advertising, launched a lot of new features, and in the future it will become a real store and a service for ordering services without leaving the application: the corresponding functions are already being tested.
There are no current studies on how much Instagram might be worth. In March 2015, Bank of America Merrill Lynch analysts estimated the service at $30-37 billion, and the advertising potential of the service was estimated at $4 billion in revenue per year.
A year later, American Forbes put Systrom on the cover and wrote that the service was already worth $50 billion. Then the number of users only exceeded 500 million people. With 100 million more people added since then, Instagram's valuation has risen even higher. In 2018, the service can earn $ 5 billion, and the number of advertisers has already exceeded 1 million. This is less than the social network Facebook, but more than any other similar service.
Experts admit: for Zuckerberg, this is the most successful deal in history. Purchase WhatsApp for $19billion has not yet brought its dividends and the messenger, albeit with 1 billion users, is still unprofitable. And the Oculus company, which Zuckerberg acquired for $3 billion (the figure was officially $2.
5 billion, but then another additional payment of $500 million was found), caused a lawsuit that ended in the departure of key employees.
For Systrom, this is the most unsuccessful transaction: Forbes writes that after waiting 1-2 years, the transaction amount could be 10 times more. Today, the founder of Instagram is a billionaire, he has about $1.2 billion and he is ranked 1678 in the list of the richest. Evan Spiegel, the founder of Snapchat who once turned down Zuckerberg, is ranked 380th with an estimated net worth of $4.6 billion. did not exceed $30 billion. Systrom himself has not yet admitted in any interview that he regrets the deal.
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