How GroupMe Sold For $85 Million Just 370 Days After Launch

GroupMe has had quite the year.

From a lawsuit, to major competitors, to raising $11 million, the founders have had serious highs and lows on their way to an exit.

We talked to cofounders Steve Martocci and Jared Hecht who told us all about the hectic first year.

*Note: An earlier version of this story was published last week.

May 2010: Jared Hecht and Steve Martocci create GroupMe at a hackathon.

GroupMe was the product of a TechCrunch hackathon, and it was originally called Grouply.

"Jared said, 'How do we make going to music festivals better?'  His girlfriend hated email chains because they never worked at concerts; they broke down once you got there," says Martocci. 

"We had a working prototype in 24 hours and took it out to a festival the next week in Colorado for a concert…and it worked."

The pair then debuted the app at the hackathon.

June 2010: Investors start sniffing around the app. Gilt Groupe's Kevin Ryan offers to lead a round of financing.

At first, Hecht and Martocci stayed at their day jobs. Martocci was a Gilt Groupe employee and built GroupMe in his spare time.

In June, they started getting a lot of investor interest. They gave their bosses a heads up, and Gilt Groupe's CEO Kevin Ryan was prepared to lead a round of financing.

Instead, Martocci and Hecht went in a different direction.

July 2010: Hecht and Martocci leave their jobs and take a real stab at GroupMe

Martocci and Hecht accepted a loan from Hecht's parents to keep their app afloat.

On July 1, they quit their jobs to pursue GroupMe full time.

It wasn't easy though. Competitors, like Fast Society, quickly emerged.

"We were getting attacked from the bottom (small companies)," Hecht recalls. "People were literally taking the exact copy we had for SMS flows and coining them as unique features."

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