Instagram CEO Kevin Systrom was at a hearing in San Francisco where California regulators were deciding on whether Facebook’s acquisition of Instagram could be allowed. Between the time Instagram started and the time they were acquired, the company ran up $2.7 million in losses.
Before raising $50 million in their most recent round of funding with a valuation just below $500 million, the company had $5 million in the bank. That was most of the $7.5 million that they had previously raised.
When an officer of the Department of Corporations asked Systrom how Instagram made money, Systrom said “That’s a great question.” He followed that up by saying, “We do not.” Instagram considered different means of making money, but nothing had came out of it said Systrom.
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