MessageMe — a messaging app that launched in March with a little Facebook controversy thrown in — has raised another $10 million, according to an SEC filing earlier today. The Series A round was led by Greylock Partners; and as part of it, John Lilly, the ex-CEO of Mozilla who is now a partner at Greylock, will be joining the board of LittleInc Labs, makers of MessageMe.
TechCrunch understands that others participating in this round are the same investors from LittleInc Labs’ $1.9 million seed round, including True Ventures, First Round Capital, Google Ventures, SVAngel, Resolut.vc, Andreessen Horowitz, and Social+Capital Partnership. The company’s angels also include Airbnb’s Brian Pokorny, Hiten Shah, Eric Wu and TinyCo CEO Suleman Ali.
Although the seed round was announced in March, just weeks after the launch of the app, it actually closed last year and went towards the company’s launch. This newest round will be used to help MessageMe keep up with growth in the future, as it faces up to an increasingly crowded field of competitors. They include biggies like WhatsApp and Facebook Messenger, both of which are popular across a number of regions; those that have built up strong followings in local markets, such as KakaoTalk in South Korea and Line in Japan; and newer contenders like the new Hangouts app from Google.
Amidst (or perhaps despite) all the competition, MessageMe continues to grow fast.
Two months ago, the app was seeing 500 notifications per second among 1 million users — despite the fact that Facebook cut MessageMe off from Social Graph access one week after it launched. The reason for that appeared to be the same as for other apps that faced the same fate: they are not allowed to use “Find Friends” features to seek out Facebook contacts on third-party apps, when those third-party apps are deemed to be competitive to/replicating core Facebook services.
Today the sent rate is apparently significantly higher, as are user numbers. We understand that the company will be sharing more specific numbers next week when it also will be announcing details for how LittleInc Labs plans to make money from its ad-free, free-to-download app.
On that front, there have already been some fairly obvious clues as to what those plans might entail: In addition to multimedia options in the app to send messages as pictures, doodles, video, voice, location and music, there are also tabs for stickers and money.
Conversely, although the two co-founders, Arjun Sethi and Justin Rosenthal, have had extensive experience with social gaming in past roles, including long periods for both at LOLapps, it’s noticeable that there is no games tab on that dashboard.
Stickers, of course, have been a very popular value-added service for other apps like Line, which makes millions each month from stickers; and other messaging apps like Path are now adopting them, too.
Money is a newer area in messaging but one that is also being chased by more than one party: Google just yesterday announced that Google Wallet would be integrated with Gmail, letting users send money as attachments. Peer-to-peer money transfers via mobile, meanwhile, have been a much-used service particularly in developing markets, where users may not have bank accounts. MessageMe could play on both of these concepts, depending on who it partners with to provide the service.
Microsoft is offering to pay $1 billion to buy the digital assets of Nook Media LLC, the digital book and college book joint venture with Barnes & Noble and other investors, according to internal documents we’ve obtained. In this plan, Microsoft would redeem preferred units in Nook Media, which also includes a college book division, leaving it with the digital operation — e-books, as well as Nook e-readers and tablets.
The documents also reveal that Nook Media plans to discontinue its Android-based tablet business by the end of its 2014 fiscal year as it transitions to a model where Nook content is distributed through apps on “third-party partner” devices. Speculation about the plan to discontinue the Nook surfaced in February. The documents we have are not clear on whether the third-party tablets would be Microsoft’s own Windows 8 devices, tablets made by others (including competing platforms) or both. Third-party tablets, according to the document, are due to get introduced in 2014.
Nook e-readers, meanwhile, do not appear to fall into the discontinuation pile immediately. Rather, they’re projected to have their own gradual, natural decline — following the general trend of consumers moving to tablets as all-purpose devices.
Microsoft and B&N representatives declined to comment for this story.
A deal to buy the digital assets of Nook Media is the natural next step for Microsoft, which first announced a plan to work with Barnes & Noble on its Nook devices and content in April 2012, ponying up $300 million at the time to help. That plan included an additional $180 million advance to develop content for its Windows 8 devices — which Nook has been doing.
To date, there have been 10 million Nook devices sold, including both tablets and e-readers, with more than 7 million active subscribers. Microsoft has seen limited interested in its Windows 8 devices (although it says it has sold more than 100 million licenses for the OS to date). Currently the Nook app is available on every major platform, including Android, iOS and Windows.
Nook Media split from the retail arm last October with a $300 million investment by Microsoft for a 16.8 percent stake in the company. The partnership was aimed at getting B&N content on then-nascent Windows 8 tablets. At the time, President of Digital Product at Nook Media, Jamie Iannone, said “It’s hardware, software, content: everything Nook is part of Nook Media. There will always be a long-term relationship between Barnes & Noble and the Nook business.”
Nook’s decline seems to have helped alter company strategy. Barnes & Noble founder Leonard Riggio proposed buying back the whole of the company’s retail operation.
The documents TC has seen values B&N at $1.66 billion. When Nook Media was first formed, the valuation of that division alone was $1.7 billion. When Pearson invested $85 million at a 5 percent stake in January, it was valued at $1.8 billion. If the deal goes through, Microsoft’s $1 billion purchase will be well below the price it had originally bought in at.
Projections in the document, which are based on company filings and management discussions, show the Nook unit bringing in total revenue of $1.215 billion for fiscal year 2012 (which for Barnes & Noble ended April 30th), for a loss of $262 million in earnings before interest, taxes, depreciation and amortization (EBITDA). It expects revenue to fall to $1.091 billion in fiscal year 2013, for a loss of $360 million as tablets are phased out — and estimates revenues to gradually recover, up to $1.976 billion by fiscal year 2017, for EBITDA profit of $362 million.
In the meantime, the Nook division has taken a beating this year following a slow holiday season. The new models have sold at a discount for weeks at a time and their flagship 10-inch Nook HD+ fell from $269 to $179. Kindle is offering the Fire HD for the same price. The hardware, while in many ways superior to Amazon’s, seems to have fallen behind in the race to market share and revenue. If Microsoft steps in, the dedicated e-reader race between the stalwart B&N and Jeff Bezos’ Amazon could be over.
John Biggs contributed to this article.
The TechCrunch SF staff normally goes to your parties, but tonight you can come to ours. And this one has a mission beyond drinking and tech talk — we’ll be donating the proceeds to a nonprofit, like we’ve done in the past. This time to Teach for America.
Teach For America trains and places recent college grads and professionals in low-income schools. Programs like this can give students the exposure and mentorship they need to develop the skills required for rigorous work in the tech industry, like coding for example.
The party is not open bar, but if you have a problem with that, ask Alexia or Eldon to buy you a drink. Because, charity. All the proceeds will go to Team TechCrunch’s fund on Causes and help us continue to kick Path’s ass.
TechCrunch, fuck yeah.
Continued here: Party In SF, For Charity
Thank you readers, you helped us kick Path to the curb in our Teach For America challenge. Muahahahahahaha. Now let’s see if we can get to that number one slot. Fear our TechCrunch power, Jessica Lessin.
To sweeten the deal we’re offering free Disrupt tickets for the first ten people who donate $500 and over to the cause. In case you missed it, we’re having a SF TechCrunch Meetup to benefit TFA, with a minimum donation fee of $15, though the more generous among you can donate in $50, $100, $500, and $1,000 increments.
Also, this Friday is my birthday, so I’m treating this as sort of a de facto birthday party because there’s no one I’d rather spend my birthday with more than you, dear readers.
Also, also, in case you missed the headline and the chance to grab a $500 ticket, today is your last day to buy Disrupt NY admission with the early bird discount. The general admission ticket price increases by $1,000 tomorrow to $2,995, FYI. A ticket grants you admission to all three days of the conference and the official after parties. Of course you could also snag a general admission ticket by participating in the Hackathon.
Startup Alley and Hardware Alley tickets are also available. These packages, available at several different price points, are perfect for budding web and hardware startups seeking an audience. Each package includes tickets to the show along with a cocktail table in Disrupt’s exhibit hall.
There are plenty of ways to get into the event and plenty of reasons to go. You will hobnob with investors, VCs, and inventors and me in case you missed my de facto birthday party. Get your ticket here.
Our sponsors help make Disrupt happen. If you are interested in learning more about sponsorship opportunities, please contact our sponsorship team here firstname.lastname@example.org.
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While the media continues to debate the severity of the denial-of-service attacks taking place across the web this month, they appear to have claimed another victim: payments startup Dwolla announced today that it, too, is now experiencing a distributed denial-of-service event (DDoS attack). The attack, which is still underway, began yesterday, resulting in either limited or no availability to the company’s website, Dwolla.com.
In a brief message posted to Dwolla’s blog, the company says that the event is still ongoing, and is preventing people from viewing the site and accessing Dwolla’s service. Also affected are third-party developers, who are using the company’s APIs to integrate Dwolla’s payment technologies into their own sites and services.
These developers were notified today, and Dwolla says that it’s working with service providers to resolve the issue.
Responding in the comments section of the post, the company told concerned users and developers that the consumer-facing API is unavailable at present, but as far as the company knows right now, actual fraud is not involved – that is, there’s no risk to users’ money, nor will this have affected transactions that took place before the attacks began.
“Funds are fine, and we do have our fraud team actively monitoring the entire situation,” wrote a Dwolla company representative, addressing a commenter’s complaint.
The company says that the attack is actually affecting its hosting provider, and they’re unsure at this time if it’s related to the SpamHaus situation.
One of the service providers that Dwolla is working with is CloudFlare, the Internet security firm that’s stepped in to protect a number of companies in the wake of these recent attacks. (You can see a CloudFlare message appear upon visiting the Dwolla.com domain at present).
The New York Times quoted CloudFlare CEO Matthew Prince this week, who equated the DDoS attacks to the Internet’s version of a “nuclear bomb.” Gizmodo later followed up on this report and another from the BBC, downplaying the scale of the attacks – they’re not affecting the entire Internet, Gizmodo claims.
Full text of the Dwolla.com blog post below, in case you’re unable to pull it up yourself (or choose not to, out of kindness):
Yesterday afternoon, Dwolla’s service providers became the victim of a distributed denial of service event, resulting in limited or no availability to the website, Dwolla.com.
This advanced event, still persists today, and is preventing people from viewing the website and consequently accessing its services. We apologize for this inconvenience and are working hard with our service providers to resolve the issue.
In the meantime, we will continue to update this post with more details.
(UPDATE 1:50pm CT: Third-party developers have been formally notified of the service interruption. Our team continues to work closely with service providers.)