Peter DaSilva for The New York TimesMike Krieger, a co-founder of Instagram, at the company’s office in San Francisco.It’s safe to say that few companies have experienced as rapid a rise in valuation as Instagram.
In February of last year, the filter-laden photo-sharing service raised $7 million in a Series A round, led by Benchmark Capital and that purportedly included Twitter co-founder Jack Dorsey and the Silicon Valley investor Chris Sacca.
The round reportedly valued Instagram at north of $20 million, according to TechCrunch. That’s a 50-fold leap to Facebook’s $1 billion takeover offer, announced on Monday.
Few Internet companies have seen such enormous growth spurts.
Groupon has seen its valuation skyrocket from a reported $250 million in December 2009 to as much as $20 billion when it began trading on the public markets last year.
But the online coupon site’s comedown has been almost as quick: Groupon’s market capitalization stood at about $9 billion as of Monday afternoon.
Facebook and Twitter have each experienced an accelerated growth trajectory, though largely over a longer time period. Remember when Yahoo offered $1 billion to buy Facebook in 2006, just two years after the social network was founded?
Potentially helping both Groupon and Instagram was timing. Both were born well into the current cycle of Internet start-ups, as investors were eagerly awaiting the next big thing having seen the enviable ascendance of Facebook.