February 3, 2011
The San Francisco, CA start-up company, Instagram, that was set up in 2010, that creates a photo sharing application for the iPhone, has raised a $7 million in its first big round of funding. This round of financing was led by Benchmark Capital, the Silicon Valley based venture capitalist and other prestigious investment companies, such as Twitter. Another participants were Jack Dorsey, the founder of Square, Adam Dâ€™Angelo, the co-founder of Quora and also the Twitter investor and former Google employee, Chris Sacca. Matt Cohler from Benchmark will join the board of directors of Instagram.
The Chief Executive Office at Instagram declared that â€œAt Instagram, the depth of our ambition lies in the goal to change the way we see the world â€“ to connect people from near and far and enable anyone with a camera to tell their story through a rich visual dialogue.â€ He also said that â€œOur new capital will also allow us to scale to the opportunity we have been handed across a variety of platforms on mobile and the web. We have got some groundbreaking stuff in the pipeline that changes the way we see and consume what is happening in our world.â€
From its launching, the company had more than 1.75 million registrations to the service, whom upload almost 300,000 photos every day, over one half of a million tags in less than a week. Instagram had one million users in December 2010, at no more than 2 months from its launching, so it seems that the growth is stable so far. The company has double the team from 2 to 4, but trying to stay efficient. Still, it seems that they are willing to make a few more hires. As the product scales and it develops new features, the company will use the investment for the growth of the engineering team. The company introduced a new hash tags feature and the news media outlets are using the app to distribute their photos and to connect with their fans.
Instagram want to expand the way they connect people through their filtered photos to a richer experience on the web itâ€™s an experiment that is definitely worth observing. With the team that apparently costs $7 million, it will surely be a success. Besides this amount of money, Instagram has previously raised $500,000 in seed funding from Andreessen Horowitz and Baseline Ventures.