Group texting startup GroupMe raises $10.6M despite being a long way from revenue
The startup lets phone homeowners produce one number for a gaggle chat. Whenever anyone sends a text message to its range, it’s sent resolute everybody else within the cluster. It works for conference calls yet — anyone will dial into the quantity and begin a gaggle chat.
The first version of GroupMe was engineered over a weekend in might throughout a hackathon, a kind of programming contest that challenges developers to fleetly produce an operating net service, sponsored by TechCrunch, the technology web log currently owned by AOL. Its creators splendidly histrion offers for funding as shortly as they left the stage.
GroupMe is made on prime of a service provided by Twilio, a San Francisco-based startup that provides quick access to voice and text-messaging services which could preferably be out of reach to little corporations. Twilio has seen comes that use telephones to try to do something from play board games to initiate cluster text electronic messaging, has been signed in style, and even has its own seed funding program to travel with it.
Right now, GroupMe doesn’t even generate any revenue — the service is totally free for users. Twilio, on the opposite hand, charges 2 cents to send or receive a text message, with potential volume discounts. no matter GroupMe’s paying Twilio, it’s a value that GroupMe seems to be pertaining to its own currency. the event cluster doesn’t have any plans to undertake to develop a revenue-generating model within the close to future. GroupMe contains a few ideas like making sponsored texting teams and complete teams. however that’s all there for the present — simply ideas — same co-founder Jared Hecht.
“We compressed our 18-month road map into nine months and we tend to still finish that up before we even think about considering revenue,” he said. “Obviously we tend to don’t seem to be targeted on generating revenue straight away.”
That didn’t stop Khosla Ventures or any of its alternative investors from throwing some money their manner. The cluster raised $850,000 in its 1st seed spherical of fundraising from the likes of West Chadic Conway’s SV Angel and lyricist Ventures. the foremost recent spherical of funding was crystal rectifier by Khosla Ventures, General Catalyst Partners, and 1st spherical Capital.
GroupMe brought on some pretty heavy-duty talent alongside the funding yet.
Jeremy Schoenherr, a former developer of the situation and iPhone OS iOS development knowledgeable, has come back on board to assist develop GroupMe’s mobile applications. Steve Cheney, a former author with TechCrunch, additionally joined the team as a business development advisor.
Now that the “distracting” fundraising method is finished and therefore the company doesn’t need to worry regarding creating any cash for a minute, it’s turning its entire concentration on up the applying, Hecht said.
“Now it’s product time, and it’s buckling down and spinning it out before we tend to even think about finding a revenue,”