Instagram is one of the most popular social media services, boasting more than one million active users and providing a platform whose purpose ranges from typical day-to-day usage such as posting photographs and interacting with friends, all the way to building an entire career based around becoming an influencer. Who is it that owns such a valuable service?
Instagram is owned by social media behemoth Facebook, Inc. It was acquired by the Zuckerberg run company in 2012 for one billion dollars, on April 9th, previously being owned by Kevin Systrom and Mike Krieger.
In a way, Instagram could be seen as a direct competitor to Facebook, employing many of the same social features on their webpage and app, making it a natural choice for Facebook to try and absorb the company.
The Buyout
To put into perspective just how large Instagram had become prior to the buyout, we can look at the download figures prior to the acquisition. The website was already seeing a significant amount of usage, as well as having an app that was dominating iOS, its original operating system but had yet to drop a version for Android users.
When that day finally arrived, users poured into the Google Play Store en masse, soaring past the one million downloads milestone before a single day was even up, sending the message loud and clear that Instagram is here to stay.
Just a little over a week later, it was announced that Facebook would be acquiring Instagram for the hefty price of one billion dollars, a figure reached through a combination of money and stock. Although it might seem like an astronomical figure, it added another weapon to the growing Facebook empire’s arsenal, making them even more dominant in the social media space.
The unique space that Instagram occupied as a pure image sharing website, complete with multiple features to make the service more attractive to use, such as filters and instant messaging, meant it was a perfect fit for Facebook.
Previous Owners
The previous owners were two software engineers and entrepreneurs from San Francisco, Kevin Systrom and Mike Krieger. They initially founded Instagram in 2010, setting out to make their service’s primary use the sharing of photographs, though that quickly expanded to include video as well.
The basic idea for Instagram, to be able to quickly share and view photos, was in a way prototyped by an app that he had designed previously, called Burbn. Burbn also had a photo-sharing feature, similar to Instagram, except with the express purpose of showcasing whiskeys and bourbons, something that Systrom was interested in.
The addition of Mike Krieger to the team is what granted them their laser focus on making it an app solely about the sharing of photographs, rather than photographs of one particular type.
Investment Rounds
Prior to becoming Instagram, the app had already attracted the attention of investors that Systrom had met with at a startup party in Silicon Valley. The two primary investors at that fledgling stage in Instagram’s life were Baseline Ventures and Andreessen Horowitz, from whom Systrom received a total of $500,000 towards the development of his idea.
Once the Krieger-assisted vision had begun to take shape, that investment grew and grew, with the pair going through a Series A (the first significant round) funding session that netted their already sky-rocketing-with-success app an extra $7 million.
With so much love from potential investors, and an app that was seeing millions of users daily on iOS, it looked like even the sky wouldn’t be the limit for the photo-sharing duo. Other social media giants clearly felt the same way, as evidenced by the Facebook buyout, but even other services in the same sphere made a run at them, such as Twitter’s Jack Dorsey putting a $500 million offer on the table.
The Facebook Era
Facebook’s plan for Instagram initially included the two original co-founders, who were left in a management position. After all, who would know it better than the two people who designed and coded it from the ground up?
In 2018, however, we saw their era come to a close as the original members had both departed from the company. The site has undergone many changes over the course of its life, and with or without the co-founders managing its growth, will still continue to grow and adapt to the ever-changing landscape of social media.