GroupMe Bought by Skype for More than $50 Million
GroupMe just celebrated its one year anniversary, and founders Steve Martocci and Jared Hecht certainly had something to smile about. A deal in the works for months was just completed, with global VOIP giant Skype acquiring GroupMe for an undisclosed price north of $50 million.
The two co-founders have scored positions at Microsoft but will run the company from New York. And while GroupMe will remain independent, it is likely to become core to Skype’s efforts in mobile, SMS and social. Skype’s over 560 million global users will certainly do a lot to boost GroupMe’s profile and user network if the two companies are deeply integrated.
Betabeat doesn’t have an exact figure, but two sources close to the deal confirmed it was more than $50 million and less than $100 million, which would make it a pretty sweet exit for a start-up that built version one at a 24-hour hackathon, has raised $11.5 million to date, and still has a lot of cash left in the back from their series B. We heard $75 million from one source and All Things D is reporting $85 million. At any rate, it’s the first big exit for several investors including Thrive Capital, Lerer Ventures and angel investor David Tisch; and you might say the first big start-up exit for New York in the current wave of lightweight, social media/web 2.0 companies.
“… Not just a big win for GroupMe and our amazing investors, but also for New York City. As part of the deal, GroupMe will remain in New York, team intact, working on our standalone application. The major difference will be that we will now have access to Skype’s 175 million monthly connected users. 175 million people. That’s a very big deal,” GroupMe writes on its blog.
Net worth-nitpicking aside, this is a huge win for a company that many questioned. Being born at TechCrunch Disrupt and having a ton of hype before any revenue led to a lot of carping. Group texting is a crowded space and a feature that isn’t very difficult to build into the core of Android or iOS. But GroupMe’s product was strong, their iterations were fast and their savvy clearly extended to the mobile space as a whole. Skype arguably picked the best of breed to help it conquer the mobile market when it decided to buy the start-up, which had originally approached them about potential commercial partnerships.
GroupMe’s 20 employees are all staying at the start-up, GroupMe says. Mr. Martocci and Mr. Hecht will get Microsoft titles, which were described by one source as “big jobs”, although the specific words in those titles are yet to be decided.
It’s not been announced whether developer Pat Nakajima, the third employee at GroupMe, will retain his business card title “Boy Wonder”; however it has been speculated that his compensation was denominated in signed Taylor Swift CDs.
The GroupMe team celebrated the acquisition Sunday at its Flatiron office with a bottle of Johnny Walker Blue.