Sequoia Capital and Jim Goetz emerge as winners in Facebook-WhatsApp $16B deal

By Nicel Jane Avellana

Feb 19, 2014 09:54 PM EST

While WhatsApp has something to celebrate about, there are two clear winners with Facebook's acquisition of messaging app WhatsApp from the standpoint of venture capital-Sequoia Capital and Partner Jim Goetz, TechCrunch reported.

With WhatsApp only undertaking a single public fundraising round, other investors can't be blamed for not making an early bet on the messaging app. Having grown to 450 million users in the past five years, it's difficult to imagine that WhatsApp was only able to secure $8 million in funding before it was acquired, the report said.

This all leads to one obvious fact: Sequoia made one smart bet with WhatsApp. So far, the deal is the biggest purchase of a startup backed by a venture firm, making it a top contender for the largest single return of 2014, the report said.

In a post about the acquisition, Goetz said, "For the past three years, it's been our privilege to work shoulder-to-shoulder with Jan and Brian as their close business partner and investor. It's been a remarkable journey, and we could not be happier for these talented underdogs whose unshakeable beliefs and maverick natures epitomize the spirit of Silicon Valley."

The messaging app isn't the first startup that Sequoia had backed that Facebook had purchased. The venture firm actually led a $50 million financing round in Instagram mere days before the social media giant swooped in to buy it. However, the acquisition of WhatsApp is the largest to date, the report said.

Hypothetically speaking, if Sequoia had around a stake of 10% in WhatsApp then it stands to earn $1.6 billion on the acquisition. This represents a return of 200 times the initial investment made in the messaging app. On its own, the deal could give a return on the fund worth $1.3 billion where the investment for WhatsApp was taken from, TechCrunch reported.

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