Instagram Value Soars

It might be free to use but that hasn’t stopped the developers of the hugely popular Instagram photo sharing app reaping the rewards. With users being picked up faster than it takes to snap a photo – Barack Obama and Kim Kardashian among them – the company behind the app has just received funding to the tune of $40 million, shooting its total value up to a massive $500 million. Not bad for a startup.

The $500 million valuation of Instagram is more than twenty times what it was valued at just one year ago, according to the Wall Street Journal, which was the first to report on its latest financing boon. The company initially launched itself with just $7 million in capital, courtesy of Andreessen Horowitz, Benchmark Capital and Baseline Ventures.

Instagram, which is currently only available on the iPhone and iPod, allows users to touch-up and share their photos via the whole gamut of social media – including Facebook, Twitter, MySpace, and its very own Instagram network – is reckoned to have picked up almost 15 million users since it was first launched just two years ago.

The app has become the king of all photo sharing and editing apps, beating off a host of competition from other, lesser apps, despite its availability being limited to just one platform. At the time of writing, it remains uncertain as to when Instagram will be made available for users of Android, Blackberry and the rest, much to their annoyance and disappointment.

Instagram allows users to touch-up and share photos

Instagram’s official line is that it’s working on streamlining its iPhone experience before focusing on other platforms. The ‘experience’ that Instagram talks of has changed a lot over the last 12 months or so, as the app has added increased functionality, although a fair few of its changes have since been reversed. Even so, nothing has got in the way of its steadily growing popularity.

Interestingly, while companies such as Facebook and Twitter have a pretty clear idea of how they intend to expand in the future, Instagram seems to be unsure of itself – or if it isn’t, it’s being very secretive about its plans. According to the Wall Street Journal, this has caused quite a few investors to back off, labeling the Instagram business model “immature”.

Sharing via Facebook has become the most popular way to use Instagram

It’s hard to say where Instagram will go next. As the Wall Street Journal notes, obvious choices for making money, such as display advertising or location based services might be an awkward fit for Instagram. Paid services such as filters are one direction they could take, while another might be to offer themselves up as a marketing service – something that is already being done informally by several Instagram users.

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