Instagram now has a higher valuation than Twitter.
On paper, at least.
On Friday, Citigroup upgraded Instagram from $19 billion to a new valuation of $35 billion.
That makes Instagram “worth” more than Twitter, which has a market capitalisation of $23 billion.
Of course, Twitter is an actual, public company, and that value is genuine. Instagram’s is theoretical.
Still, Twitter was worth almost $40 billion this time last year, before dropping below $18 billion market cap in May.
“Using what we believe to be conservative assumptions around user growth and monetization, we believe Instagram is worth $35 billion,” said Citigroup in the report. “While Instagram is still early in monetizing its audience and data assets and its financial contribution to Facebook is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2 billion in high margin revenue at current user and engagement levels if fully monetized.”
“Not only is Instagram’s audience now larger than Twitter, but its users are 1.8x more engaged, and user growth has been greater,” the report continues. “Instagram is at the early stages of rolling out advertising, but we believe brands have and will find it an effective channel.”