San Francisco: Facebook will pay $1 billion in cash and stock for photo-sharing application ‘Instagram’, making it’s largest-ever acquirement months before the No. 1 social media website is likely to go public.
The popular Instagram application, which allows users to add filters and effects to pictures taken on their smartphones, has increased about 30 million users since it first launched in January 2011.
Start, with about a dozen employees based in San Francisco, allegedly closed a $50 million funding round previous week from investors comprising Sequoia Capital that valued the company at $500 million, according to the reports.
Facebook CEO Mark Zuckerberg said that “This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all.”
The deal, an intimately kept secret at the tiny start-up, is likely to close this quarter. CEO Kevin Systrom announced the transaction to Instagram employees at a meeting on Monday, according to the sources.