File this under staggering: Facebook announced today that it will acquire photo-sharing app Instagram for $1 billion.
"For years, we've focused on building the best experience for sharing photos with your friends and family," Facebook CEO and founder Mark Zuckerberg wrote on his own Facebook page. "Now, we'll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests."
This news comes at an unusual time, as Instagram just raised $50 million in a Series B venture round, led by Sequoia Capital—putting the company at a $500 million valuation, according to a source familiar with the deal.
Instagram CEO and co-founder Kevin Systrom wrote today on the company's blog: “With the support and cross-pollination of ideas and talent at a place like Facebook, we hope to create an even more exciting future for Instagram and Facebook alike.”
While there isn’t much detail about how Instagram—which has 27 million users, and only about a dozen employees, will be integrated into Facebook—Systrom didn’t mince words about one thing.
"It's important to be clear that Instagram is not going away," wrote Systrom. "We'll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience."
The deal means a whopping payday for Systrom: The CEO, who reportedly owns 40 percent of the company, will net a cool $400 million. Co-founder Mike Krieger owns about 10 percent, so his payday is around $100 million.
About 14 months ago, Instagram closed a $7 million Series A round and was valued at a mere $20 million. In the last few months, the company has seen a flurry of activity. First, with its huge venture round and valuation, and then with a stellar debut of an Android version of the app (which was downloaded 1 million times in its first 12 hours on the market.)
The cash-and-stock deal will reportedly close later this quarter, and it's by far Facebook's largest acquisition to date. Some would say the deal marks Zuckerberg's readiness to squash any competition.
Here's a few noteworthy details you may have not known: