Sequoia put $60 million into WhatsApp before its boom. Years later, Facebook agreed to buy the messaging app for $19 billion

Sequoia Capital made an early investment in WhatsApp, putting about $60 million into the messaging company across several funding rounds. Years later, Facebook agreed to acquire WhatsApp for $19 billion, creating a major return for the venture capital firm.

TechCrunch reported on Feb. 19, 2014, that Sequoia’s stake could be worth about $3 billion following the deal, based on the assumption that the firm owned almost 20% of WhatsApp.

Sequoia invested about $60 million in WhatsApp

WhatsApp had publicly announced an $8 million Series A round led by Sequoia Capital. According to TechCrunch, however, the company had also raised two additional rounds, including an unreported $50 million Series C.


Sequoia led both of those later rounds as well. Altogether, TechCrunch reported that Sequoia had invested about $60 million in WhatsApp.

The investment gave Sequoia a total ownership stake in the high teens, according to the report.

Facebook agreed to buy WhatsApp for $19 billion

On Feb. 19, 2014, Facebook announced that it had agreed to acquire WhatsApp for $19 billion.

At the time, WhatsApp had reached 450 million active users, having built that user base over the previous five years, according to TechCrunch.

The publication described the transaction as the largest acquisition of a venture-backed company in history at the time.

For Sequoia, the acquisition represented a significant outcome from its early investment.

Estimated Sequoia’s stake was at about $3 billion

TechCrunch estimated that Sequoia’s WhatsApp stake could be worth about $3 billion in cash and stock following the acquisition.

That calculation was based on an assumption that Sequoia owned almost 20% of WhatsApp. The article said the firm’s actual ownership was in the high teens.

TechCrunch calculated that the deal represented a 50-times return on Sequoia’s investment in WhatsApp.

The publication also reported that the transaction could provide more than a two-times return on the $1.3 billion fund from which the initial WhatsApp investment came.

Jim Goetz highlighted WhatsApp’s global reach

Sequoia partner Jim Goetz, who worked with WhatsApp’s founders, discussed the company’s growth and international reach following the acquisition announcement.

According to TechCrunch, Goetz pointed to particularly strong engagement in countries including Spain and Brazil. He also said WhatsApp had nearly half a billion users and could eventually reach a billion or more.

Goetz highlighted the level of engagement among WhatsApp users, according to the report.

WhatsApp was already making money

WhatsApp’s growth was not the only factor Goetz discussed.

According to TechCrunch, Goetz said WhatsApp had already paid income taxes when Sequoia invested in its Series A round. He described that as unusual for a company at that stage.

The article also reported that WhatsApp had been making money for years.

Sequoia had another Facebook acquisition connection

WhatsApp was not the first company backed by Sequoia to be acquired by Facebook.

TechCrunch reported that Sequoia had led a $50 million financing round for Instagram just days before Facebook acquired the photo-sharing company.

The WhatsApp transaction, however, was much larger.

Sequoia had never invested directly in Facebook, but the WhatsApp acquisition still gave the venture capital firm a substantial outcome from a company acquired by Facebook, according to TechCrunch.