Yahoo Acquires Mobile Messaging App MessageMe
Yahoo has acquired mobile messaging application MessageMe, a Whatsapp-like service with $11.9 million in reported outside funding. The deal, we’re hearing from multiple sources, is a talent acquisition falling into the “single-digit” millions. [Update: We’re hearing now that the deal may actually better than this. Word is the deal is actually in the double-digit millions, and has been structured to be favorable to investors and employees alike.] Yahoo is announcing the acquisition internally today, and the MessageMe team begins work Monday.
MessageMe raised $10 million in Series A funding early in 2013, in a round led by ex-Mozilla CEO John Lilly of Greylock Partners. Other investors in the startup include a number of high-profile VCs, including True Ventures, First Round Capital, Google Ventures, SVAngel, Resolut.vc, Andreessen Horowitz, and Social+Capital Partnership, and other angels – many of whom also financed a prior $1.9 million seed round in March 2013.
The company was largely able to raise such funds on the strength of its team and what appeared to be ever-quickening growth. Co-founders Arjun Sethi and Justin Rosenthal had extensive experience in social gaming prior to founding MessageMe. Sethi used to run an early social gaming company called LOLApps, before it merged with a publisher 6Waves.
The belief was that their backgrounds would help them to better understand how to grow a product quickly and virally.
MessageMe reached its first 1 million users and closed on seed funding – a sort of no-brainer for investors looking for the next breakout hit in mobile messaging. By May 2013, it hit 5 million users only 2.5 months after it debuted. But that growth was not sustainable, as it turned out.