Instagram raises $7M, reveals its iPhone app is only the beginning

Instagram - Fast, beautiful photo sharing for your iPhoneInstagram has landed itself a position in the hot new startups category. The photo filter and sharing app just pocketed $7 million in a round of fundraising, and has been steadily increasing its registered users, which are exceeding 1.5 million. What is Instagram going to do next? That’s easy: Build a team of “world-class” engineers.

Setting the bar high is commendable and all, but why exactly does an app need engineers of this caliber? According to TechCrunch, to extend its platform reach (read: Android and tablet users, it’s coming your way). In an interview, co-founder Kevin Systrom all but revealed that Instagram will eventually become more than just an app. “Instagram has an underlying ambition to change the way we see the world – to connect people from all over the world and enable people to tell their story through a rich visual dialogue. Our new capital will allow us to scale to the opportunity at hand across platforms both on mobile and the Web.”

Even still, it seems suspect all the attention an iPhone app is getting (it hasn’t been released for Android devices yet, but that could be coming at this year’s SXSW). There’s a lot of money and some big names tied to Instagram now (including former Facebook CTO and current Quora exec Adam D’Angelo, who knows a thing or two about investment-worthy startups).

paperclipsIt’s important to acknowledge how much competition Instagram faces. Photo and filter apps, especially those with built-in social networks and Facebook integration, are a dime a dozen. Its most notable rival is easily Hipstamatic. While Hipstamatic easily has a more engaging UI that camera geeks love for its ode to retro models and attention to lens, flash, and filter detail, it isolates a wider audience for a few reasons: It isn’t free, it has too many in-app purchases, and it doesn’t have a method for organizing and connecting its users.

The idea of extending the way Instagram connects people through their pre-packaged filtered photos to a richer Web experience sounds a lot like Flickr, or a Tumblr that is exclusively built around shared images and user location. But, with the right team (which is apparently where that $7 million is going), it’s an experiment we’d definitely want to watch.

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