Photo: Twitter / @jack
A $1 billion acquisition is rare, but there are a few startups that could share the same fate as Instagram.Many of them have raised so much venture capital, their valuations are already in the billion-dollar range.
We’ve compiled a list of the next likely acquisition targets and which big companies are most likely to buy them.
Jack Dorsey's mobile payment solution, Square, would help a big payment provider like Visa or American Express stay relevant. Neither has a good mobile solution and Square was made with credit cards in mind. (Visa is an investor in Square, but we're talking outright buy.)
Kleiner Perkins led a $100 million round of financing in Square at the end of June. Now the company has a $1 billion valuation; some wonder if it could be worth as much as $2 billion.
Yelp should acquire Foursquare but it doesn't have enough money. It could be a smart $1 billion acquisition for Groupon, though.
Location-based check in startup Foursquare closed a $50 million round last June. That's in addition to the $20 million it previously raised.
Foursquare's rumoured valuation has been as high as $1 billion.
It has more than 20 million users, so it's not quite as big as Instagram, but Groupon could find the location data it has valuable when targeting deals to users.
The music company raised $100 million in June from Kleiner Perkins, Accel and DST, giving it a $1 billion valuation.
It has more than 10 million users and a few million of them are paying subscribers. It's in 13 countries and has a popular mobile app.
The pay-per-song model is losing marketshare to free streaming options like Spotify offers, so Apple may need to bite the bullet and take out Spotify. But it might cost more than $1 billion to do it.
In 2010, short term housing rental site Airbnb's bookings grew 800% to 800,000; that number was increasing by 40-50% per month last year.
It raised a massive $112 million round, reaching a billion-dollar valuation.
eBay could purchase Airbnb and easily integrate it into its marketplace. For a forward-thinking hotel chain, it could be a smart acquisition. People are turning more to each other for housing than expensive places for short-term stays.
In 2010, the Angry Birds maker generated $5 million in revenue and $3 million in profits. Last year, Rovio raised a massive round, shooting its valuation up to $200 million. To Zynga or Disney it could be worth much more than that.
Rovio has already turned down a $2 billion acquisition offer from Zynga, but that doesn't mean Zynga shouldn't keep trying.
Everything Rovio has released has been a hit, including Angry Birds Space which jumped straight to the top of the App Store.
With its merchandise arm going strong, Disney would also be smart to acquire Rovio. Rovio has said it wants to be the Disney of the digital age.
Pinterest raised a $27 million round at a $200 million valuation, but investors are already trying to invest at a $1 billion valuation.
That means they think they company is worth more like $5 billion.
To a company like Google or Amazon, it could be. Pinterest and Amazon seem like the perfect marriage of discovery, content, and commerce.
Since its relaunch last year, Fab has secured more than 3 million registered users and it generates $300,000+ per day. It has raised more than $50 million in venture capital at a $200 million valuation.
To improve its product discovery deals, it'd make sense for Groupon or LivingSocial to spend big bucks on Fab.
For a crazier idea, a company like Ikea should swoop in and buy it. Ikea is known for funky home decor on the cheaper end and it doesn't have a good online or mobile presence. Fab would be a valuable addition.
Founded in 2007, Bleacher Report has quickly risen in the ranks to become the #4 sports site on the web with 25 million monthly unique visitors.
For all of its acquisitions, AOL doesn't have a sports section and it could use one like Bleacher Report. Bleacher Report would also be a valuable addition to Yahoo Sports.
Granted, AOL or Yahoo could probably obtain Bleacher Report for much less than $1 billion. Media companies don't usually get acquired for such a high price; The Huffington Post, for example, was a $315 million acquisition.
Dave Morin has already turned down a $100 million offer from Google for his mobile social network, Path, and that's before the app had any traction.
Since it's November relaunch, it has emerged as the best social network experience on a mobile device. Facebook's Instagram acquisition was an effort to improve its mobile experience, but it could use technology like Path's to make it even better.
Google could use it too for Google+ once Path has a few more users. Last we checked there were about 3 million people using Path.
Yammer helps enterprises communicate better via their very own social networks.
It raised $85 million in late February and it'd make a lot of sense for Salesforce to buy it out of business.
Quora's last valuation was $86 million, but it has already turned down one $1 billion acquisition offer.
Last year it was rumoured to be raising another round, but was rejecting offers that would make its valuation a 'mere' $300 million.
Although Quora could get acquired for $1 billion, its founders are already pretty wealthy from their early Facebook days and don't seem to want to sell.