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Sequoia Capital

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Natch, the big winners of the week are Jan Koum, Brian Acton and the 50-odd employees that make up WhatsApp, the mobile messaging application that just sold to Facebook for more than $16 billion.

Note, however, the other big winner in the deal: Sequoia Capital, one of WhatsApp’s biggest backers since the company’s founding in 2009.

Sequoia participated in three separate financing rounds over the past three years, according to people familiar with the matter, with a total of more than $60 million invested in WhatsApp. The majority of Sequoia’s ownership was purchased in the initial $8 million Series A round. Sequoia led all three rounds of venture funding, according to sources, and the majority of that investment came in the final $50 million Series C round that closed in 2013 (which went unreported).

That places Sequoia’s stake somewhere in the high teens, sources said, which could ultimately land Sequoia with an investment return windfall in the neighborhood of $3 billion, based on the $16 billion acquisition price on Wednesday.

“Our excitement about the opportunities that lie ahead for WhatsApp and Facebook is tinged with a little sadness, and a lot of nostalgia, for the pleasure and satisfaction that all of us at Sequoia have felt working with the company over the past three years,” Jim Goetz, partner at Sequoia and board member for WhatsApp, wrote in a blog post Wednesday.

Remember: It’s not Sequoia’s only big app deal with Facebook. Just days before Instagram sold to Facebook for $1 billion — the social network’s largest acquisition ever at the time — Sequoia led and closed a highly competitive Series B round of $50 million in funding, valuing Instagram at half a billion dollars. Only days later, Sequoia would make a healthy return on its investment.

Two major acquisitions by the world’s largest social network in just a few years isn’t half bad, I’d say.



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