VCs flocking to mobile photos: Instagram raises $7M

Instagram, the startup behind a popular iPhone application for editing and sharing photos, just announced that it has raised $7 million in funding led by Benchmark Capital.

Back in December, I heard that Instagram was raising funding from Benchmark, although the deal wasn’t closed yet. Instagram said today that Benchmark’s Matt Cohler, who was formerly Facebook’s vice president of product management and has been described as a close advisor to CEO Mark Zuckerberg during Facebook’s early days, is joining Instagram’s board of directors.

Instagram also unveiled some famous new angel investors, including Quora co-founder/former Facebook chief technology officer Adam D’Angelo, Twitter and Square founder Jack Dorsey, and Lowercase Capital’s Chris Sacca.

I’ve already been impressed by the speed of Instagram’s growth, and the San Francisco startup shared more numbers today — it said it now has nearly 2 million registered users who post more than 290,000 photos per day. Again, that’s less than four months after the app first launched.

Instagram launched at around the same time as two other high-profile mobile photo apps — Path and Picplz. All three companies now have high-profile backing. Andreessen Horowitz invested in Picplz (the firm also backed Instagram back when it was focused on location app Burbn, but partner Marc Andreessen said he will take a passive role in Instagram), and yesterday Path announced funding from Kleiner Perkins Caufield & Byers.

Noticeably absent from the investor lineup is Sequoia Capital, which was earlier rumored to be backing Instagram. Sequoia did end up investing in blogging service Tumblr, which is so photo-heavy that it could be seen as a photo-sharing site.