Cowen values Instagram at $33bn - here's why

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Could Instagram really be worth $33 billion? Cowen Group thinks so, and one of its senior analysts told CNBC why.

"We're comfortable with that number because Instagram is bigger than Twitter , and they're growing faster," John Blackledge told CNBC's " Squawk Alley " on Friday. "Instagram ended 2014 with 300 million users versus 200 million users in March, adding 400,000 users a day."

Cowen released its Instagram valuation Thursday, two months after Citigroup valued the photo and video-sharing app at $35 billion.

The New York City-based firm's forecast also has the number of Instagram users more than doubling by 2020, noting that its estimate may be conservative due to the recent user growth acceleration. "Per our social user survey in November 2014, users spend 21 minutes per day on Instagram and about 90 percent that overlap as Facebook users spend 74 minutes per day total on both services versus non-overlap users [who spend] 68 minutes [per day]," Cowen said in its note.

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Another reason the Facebook-owned app's value is so high is because of its potential growth in advertising, Blackledge added. "We asked advertisers in which platform did you not advertise last year that you expect to advertise on in 2015 and Instagram was number one. Thirty percent of advertisers expect to advertise on the platform, [citing] fast-growing users, high engagement, and brand affinity."

-CNBC's Joshua Ascher contributed to this report.