GroupMe Reaches the Half Dozen Friends That Really Matter

GroupMe is the latest darling of the New York startup scene, a bet on the idea of intimate group texting as an antidote to the overload of other social networks that broadcast to large groups of followers.

CNN chronicles the rise of this company, from a TechCrunch "hackathon" at a conference seven months ago, to now, when the company has closed a funding round believed to be in the range of $9 million, with a valuation of $30 million.

So it is full speed ahead for founders Jared Hecht and Steve Martocci, previously of the Gilt Groupe and Tumblr. You can watch them discuss the company here:

"For some people who don't really understand Twitter or the concept of a status update, they do understand conversing with their friends or conversing with their families," Martocci says. The business model is based on sponsorships and advertising. While the company has plenty of rivals, investors say it's timing is perfect, and that counts for a lot.

Another takeaway: Engineering talent, not money, is often the limiting factor as startups struggle to get off the ground. The price of engineering talent is rising, even as the cost of technology infrastructure is falling, thanks to cloud computing.

Charlie O'Donnell an early investor in GroupMe, told CNN that "deals are moving quickly, especially for startups targeting the consumer market."

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