Tokyo, Japan, March 16, 2021–Bloomberg News/ReutersThe world’s largest social network, Instagram, has said it will invest $2 billion to expand its core business, including into online advertising, video and photo editing, video game development and digital advertising.
In its quarterly filing with the Securities and Exchange Commission (SEC) last week, Instagram said it expects to report revenue of $1.9 billion in 2019, compared with $1 billion a year ago.
The company said its digital revenue will increase from $1 trillion in fiscal 2020 to $2 trillion in 2019.
Instagram said the new investment will enable the company to continue to grow its revenue and provide its users with more relevant content.
The deal will give Instagram a core business that will allow the company “to provide a richer experience for the millions of people who use Instagram daily,” CEO Kevin Systrom said in a statement.
While the investment is expected to create new jobs, it also will expand Instagram’s reach, including by creating a platform for brands and publishers to reach users on social media.
“As we enter the 21st century, Instagram’s core business will be critical to the growth of its services, including its advertising business, its video and image publishing, and its digital products and services,” the company said.
With Instagram, the company will be able to offer a better experience to its users, which could lead to more advertising, according to the SEC filing.
Since its IPO in 2014, Instagram has become the largest social media company in the world, with over 8.5 billion users, according the company.
Instagram said in March it has about 5 million ads on its platform, which account for 40% of its revenue.
According to Bloomberg, Instagram will invest about $1 million into expanding its core digital business, which includes its video, video games, video advertising, and video production businesses.
Last month, Instagram raised $2bn in Series B funding, which was led by private equity firm Sequoia Capital and the private equity arm of Microsoft Corp., and by private-equity firm Golden Point Capital.
This is a developing story.
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