Photo: Owen Thomas, Business Insider
At a hearing in San Francisco where California regulators were deciding on whether to allow Facebook’s acquisition of Instagram to go ahead, Instagram CEO Kevin Systrom gave an overview of the company’s finances.In its two years of existence, he said, Instagram had run up $2.7 million in losses. Before it raised $50 million in its most recent round of financing in March, at a valuation that Systrom said was “just south of $500 million,” the company had $5 million in the bank.
That’s most of the $7.5 million it had previously raised.
An officer of the Department of Corporations asked Systrom how Instagram made money.
“That’s a great question,” said Systrom. “We do not.”
Instagram had considered various means of making money but “nothing came of it,” Systrom explained.