In what is being called the largest mobile app acquisition in history, Facebook’s $1 billion buyout of Instagram is landing the iPhone app’s founders in a boatload of cash. Instagram’s two co-founders, Kevin Systrom and Mike Krieger, will cash in $500 million combined as a result of getting in bed with the social network behemoth. Quite the pay day for an app that’s been in the App Store for barley two years.
Wired reports:
CEO Systrom owns 40 percent of Instagram, according to a source close to the company, who provided Wired with figures from 2011. That will net Systrom $400 million to take home as a result of the deal. Co-founder Mike Krieger holds about a 10 percent stake, and will net around $100 million. Benchmark Capital, the venture capital firm which led Instagram’s Series A funding round in 2011, has about an 18 percent stake, netting roughly $180 million from the deal. Andreessen Horowitz and Baseline Ventures, two investment firms backing Instagram, each have about a 10 percent stake, netting just under $100 million apiece.
Instagram has 13 full-time employees who will each receive part of a $100 million pool. Employees with seniority will be awarded more cash than new hires.
With 30 million users and a hot new Android app, Instagram is the creme de le creme of social photography apps. Here’s to hoping it stays that way.
Alex Heath is a journalist who works for Tech Insider. He’s the former co-host of The CultCast. He has been quoted by the likes of the BBC, KRON 4 News, and books like “ICONIC: A Photographic Tribute to Apple Innovation.” He lives in Lexington, Kentucky. If you want to pitch a story, share a tip, or just get in touch, additional contact information is available on his personal site. Follow him on Twitter.
