We've confirmed from two sources, one directly involved in the financing and one familiar with the matter, that Instagram closed a $50 million round at a $500 million valuation prior to its $1 billion acquisition from Facebook.

The round was first reported by Alexia Tsotsis of TechCrunch.

"Instagram raised money on a Thursday and sold on a Tuesday -- 2X money in four days!" we were told.

Investors were Sequoia Capital, Thrive Capital and Greylock Capital.

Here's what  happened:

Kevin Systrom, Instagram's CEO and co-founder, didn't want to sell the company. So he raised $50 million with every purpose of growing Instagram into a massive business.

When Facebook learned of the closed round, it "flipped out," says a source (we've always said Facebook was threatened by Instagram).

The source says Facebook swooped in in the last 24 hours and made the irresistible $1 billion offer, but it wasn't part of the talks when the $50 million financing closed a week prior.

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See Also:

• WELL-PLAYED ZUCKERBERG: Buying Instagram For $1 Billion Is A BRILLIANT Move
• Kevin Systrom First Turned Down Facebook — Now Mark Zuckerberg Bought Him For $1 Billion
• What Normal People Really Think Of Instagram