New York-based Meetup, an online platform for organizing real world get-togethers, is today announcing its first acquisition since its founding back in early 2002. The company is acquiring Dispatch, a TechStars grad focused on email-based collaboration, which got its start as a TechCrunch Disrupt NY 2011 hackathon participant. Given its ambitions, Dispatch had only raised a small (under $1 million) amount of outside funding to date. The acquisition terms were not provided, but from what we’re hearing it was basically a small deal.
Investors in Dispatch included Thrive Capital, which led the 2011 seed round, as well as SV Angel, Lerer Ventures, David Cohen, David Tisch, and others. Thrive did not hold a board seat, we’re told.
Dispatch founders Jesse Lamb, Nicholas Stamas and Alex Godin are now joining Meetup, where they’ll form a new product team focused on improving communications within Meetup Groups.
For those unfamiliar with Dispatch’s focus, the startup had initially been working on building an online workspace that connected Dropbox, Google Docs, Evernote and Box, allowing teams to manage and collaborate on work projects in the cloud. But failing to gain significant traction for that product, the company pivoted this summer to shift its efforts to improving email-based collaboration.
At the time, co-founder Jesse Lamb explained that one of the issues Dispatch’s earlier product had was that when people fell off the platform, it was because they had reverted to using email. The company also rebranded from Dispatch.io to Dispatch.cc alongside the relaunch.
Dispatch reached a place where it would have needed an additional round to continue its efforts, but was having troubling raising from what we’ve heard. The product was struggling a bit to find a way to best incorporate itself into user workflows, as the pivot indicated. In addition, while the service, as it ended up, worked something like a group email address – like a Google Group or listserv, for example, but one allowing for more granular user controls – it didn’t offer integrations with other services where teams may have already been working on projects, like Basecamp.
This made it difficult for Dispatch to really carve out its niche, given it was light on features that would have allowed to to handle more structured tasks, timelines and deadlines, while still aiming to mirror those email-based work conversations to the web. As we noted at the time of the pivot, Dispatch still had more work ahead of it to become a fully fledged collaboration tool.
That being said, Dispatch did have a number of good features as well as a modern design and layout which you could easily imagine as part of a larger product, like Meetup.
According to Meetup CEO Scott Heiferman, despite the company’s age, it has only been over the past year to eighteen months that he feels Meetup really reached the “tipping point” in terms of network effects. “We’re growing faster than ever right now,” he says. “We kind of like being a little under the radar – a lot of people use Meetup, but people don’t think of us as the ‘hot’ startup. That’s fine by us. We’re coming up on 20 million members, and we just hit 3 million people [going to meetups] this past month.” (Meetup currently has 14.5 million members and is planning to add 5 million more this year.)
At times, the company is hosting as many as 20,000 meetups daily, he tells us. It has 200,000 groups total. In addition, Meetup has been profitable for three years, thanks to its subscription business which charges organizers $15 per month to run their groups, equating to an over $20 million annualized run rate.
MEETUP’S COMMUNICATIONS NEEDED WORK, DISPATCH TO HELP
Along with Meetup’s growth, the company has also seen a surge in social interactions on the site, which is where Dispatch can help. Meetup comments this year have grown from 1 million to now 3 million. But Meetup’s communication technology is still rather old-school. “The technology is stuck in 1997 – basic mailing lists, basic message boards and basic commenting,” Heiferman admits. When he came across Dispatch – a serendipitous encounter that came about after first running into Godin in an elevator at the Personal Democracy Forum event – he realized that what the team had built could help Meetup with one of the larger items on its roadmap: improving communications.
Heiferman declined to discuss the specifics of the Dispatch technology integrations, but said that it would arrive by Q1 2014. The changes will involve better abilities for groups to communicate both online and on mobile. Unlike on Facebook where it’s about messaging people you know, or mobile messaging apps which are like better IM tools, Meetup aims to be a place where you can message people you don’t know, but want to interact with.
“If you’re in the San Francisco 3D Printing meetup and want to find a printer that’s available this weekend, you should just be able to fire out that question to that community,” says Heiferman. “Or you might not be best friends with all the ‘working moms’ in your neighborhood, but wouldn’t it be great to fire out a message saying ‘I really need a babysitter Saturday night, can anyone help me out?’ Facebook is not going to help you with that,” he notes. (Incidentally, ‘mom’ meetups are the largest category on the site, while tech events account for less than 5% of meetups today.)
Communications is only one area where Meetup is planning on making improvements in the months ahead. The company is also looking at other areas like payments, better international support, mobile improvements, design upgrades, and more. In some cases, these developments will be aided by future acquisitions.
But these will likely be smaller deals like this, where it’s about strategically adding smart, passionate people to the Meetup team. Heiferman insists that Meetup is focusing on staying relatively small itself – it’s 96 people today, and he wants it to continue to maintain its low profile as opposed to “flipping it” for a profit, or moving to an IPO.
Meetup is also still working to grow its revenues, and plans to announce some changes to its revenue model in the next few weeks.