Instagram App: Zero to $1 billion in 17 months!

Back in October 2010, Instagram launched its first app. Little did people predict that today it would be bought for $1 billion.

The app had almost 200,000 users within the first week. By February of that year, it had 1.75 million users, and reached 4 million three months later. Growing to 14 million users in just over a year, Instagram now has more than 35 million users and counting.

“We were all like, ‘what’s the big deal? It’s just photos and filters,” Brian Blau, a Research Director with the Consumer Technology and Markets Group at Gartner, told Mashable. “There’s something to be said around that simplicity.”

If you’re not familiar with this craze, here’s the 411:
Instagram is a free photo sharing and social networking service for your iPhone, and recently now Android. Users download the app from their app store and can take pictures with the app’s camera feature. The pictures can then be edited with various lighting effects and boarders before uploading to any synced social network, such as Twitter or Facebook. The pictures are also shared on the Instagram network itself and users can create their own albums to share with friends. Simply put, it is basically photos and filters.

This past Monday, April 9, Facebook acquired Instagram for $1 billion. On that day, The startup’s iPhone app had30 million downloads marked. In the same week, its six-day-old Android app hit the 5 million downloads. Correspondingly, Instagram’s valuation shot up. Facebook acquired Instagram just as the startup was closing a round of funding at a $500 million valuation. Instagram’s $1 billion price tag means it literally doubled its valuation within a week.

Interesting enough, if we look strictly at the acquisition cost per user, Facebook is paying roughly $28 for each of Instagram’s 35 million users. According to Wired Magazine, the median cost across all the acquisitions is about $92 per user—so Facebook got a steal!

Regardless, the $1 billion price tag proves Instagram’s value. With social network photo giant, Facebook as its owner, this picture app is bound to keep skyrocketing its numbers.

To learn more about Instagram or other social networking trends and optimization, contact Stellar Blue’s crew today!

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