What Skype Really Paid For GroupMe

On Sunday we broke the news that Skype was acquiring group messaging service GroupMe. What we didn’t know was the price, and neither company disclosed any of the terms of the deal other than that GroupMe would remain a standalone brand for now, and the team would stay in New York.

A widely spread report said that Skype paid as much as $85 million for the year-old company. We’ve heard this number is a bit high, and includes an earnout or deferred payments. What’s the real price?

Our sources close to the companies say the initial payment for GroupMe is $43 million, and deferred payments (or an earnout) can get the GroupMe shareholders as much as $68 million over four years. The founders will receive another few million dollars as part of their long term employment agreements.

Why the difference? No idea. But I have a high degree of confidence that Skype will pay somewhere between $43 million and $68 million for GroupMe. Which is one heck of a win for the founders and investors, who put $11.5 million into the company.

As an aside, when we add estimated acquisition prices to CrunchBase, we usually put in the higher number instead of a range. I like being optimistic, and we can always edit it downward later if new information becomes available.

Skype is a software application that allows users to make voice and video calls and chats over the Internet. Calls to other users within the Skype service are free, while calls to both traditional landline telephones and mobile phones can be made for a fee using a debit-based user account system. Skype was founded by Niklas Zennstrom and Janus Friis who were also the founders of the file sharing application Kazaa. Skype has also become popular for its additional...

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GroupMe helps people stay connected and get together better with their friends. GroupMe’s two core offerings are: GroupMe, the group mobile messaging service, and Experiences, a service for finding, planning and purchasing group activities. GroupMe is based in New York and was founded by Jared Hecht and Steve Martocci in May 2010 at the TechCrunch Disrupt Hackathon. In August 2011, GroupMe was acquired by Skype, which was subsequently acquired by Microsoft in October 2011. For more information, please visit...

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