Twitter Considered Acquiring GroupMe Before Bidding War Began

By Beecher Tuttle November 09, 2010

Twitter was mulling over the idea of acquiring the New York-based startup GroupMe before a fast-moving funding war between venture capitalist firms drove the price to an untenable level, an unnamed source told Business Insider.

GroupMe, which created a service that lets users text groups of people using one mobile phone number, was only launched this summer but has already made a name for itself in the technology space. VC firms were eager to invest in the company because of its impressive growth chart, which the source referred to as "nuts – thousands of percent." GroupMe's early success is particularly remarkable considering it is not the only company to offer such a service. Analysts speculate that the startup's service has become a hit because it is compatible with all phones, not just handsets that run on operating systems owned by Apple and Google.

After all was said and done, the startup raised a round of funding that will put its valuation somewhere around $30 million, according to All Things Digital. The second round of funding was led by Khosla Ventures, although other major VC firms were said to have expressed interest in investing in the company.

The bidding war became so competitive, one investor allegedly flew to New York over the weekend to make a personal appearance in front of GroupMe's management team, according to Business Insider. The startup apparently had multiple term sheets to choose from before deciding to go with the package put together by Khosla Ventures. Other VC firms that were said to be under consideration include Sequoia, Andresseen Horowitz, General Catalyst, Flybridge and Union Square Ventures.

While Twitter considered acquiring the startup a few weeks ago, the bidding war killed any potential deal. The company has decided to replicate the service internally and market it on its own. 


Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Bloomberg BETA: Models Are Key to Machine Intelligence

By: Paula Bernier    4/19/2018

James Cham, partner at seed fund Bloomberg BETA, was at Cisco Collaboration Summit today talking about the importance of models to the future of machi…

Read More

Get Smart About Influencer Attribution in a Blockchain World

By: Maurice Nagle    4/16/2018

The retail value chain is in for a blockchain-enabled overhaul, with smarter relationships, delivering enhanced transparency across an environment of …

Read More

Facebook Flip-Flopping on GDPR

By: Maurice Nagle    4/12/2018

With GDPR on the horizon, Zuckerberg in Congress testifying and Facebook users questioning loyalty, change is coming. What that change will look like,…

Read More

The Next Phase of Flash Storage and the Mid-Sized Business

By: Joanna Fanuko    4/11/2018

Organizations amass profuse amounts of data these days, ranging from website traffic metrics to online customer surveys. Collectively, AI, IoT and eve…

Read More

Satellite Imaging - Petabytes of Developer, Business Opportunities

By: Doug Mohney    4/11/2018

Hollywood has programmed society into believing satellite imaging as a magic, all-seeing tool, but the real trick is in analysis. Numerous firms are f…

Read More