Facebook's $19B Acquisition of WhatsApp Breaks Record
February 20, 2014
WhatsApp has agreed to be acquired by Facebook (NASDAQ: FB) for a colossal $19 billion—the single largest acquisition of a VC-backed company ever. The deal includes $12 billion in Facebook stock, $4 billion in cash and $3 billion in restricted stock units for founders and employees.
One detail that caught our eye was the April 2011 $8 million Series A round led by Sequoia Capital that valued the company at $32 million. Fast forward to today and that translates into a 9.2% stake valued at $1.47 billion, generating a breathless return of 184x for those Series A investors. The fund used by Sequoia (Sequoia Capital 2010) is a $1.36 billion fund, meaning that the firm will return nearly all of that just from their portion of this single Series A investment.
To see Sequoia's recent investments, funds and team, check out the free PitchBook Platform profile linked above.
For those not familiar with WhatsApp, it is a cross-platform mobile messaging app that lets users exchange messages without having to pay for SMS. The company, which has 450 million monthly active users (70%+ of whom are active each day), charges users 99 cents annually after the first year. WhatsApp employs only about 50 people, including 32 engineers, and has spent $0 on marketing to date. The company will remain autonomous and will operate independently, while its co-founder and CEO, Jan Koum, will join Facebook as an executive and will take a seat on Facebook's Board of Directors.