Messaging app Beeper is acquired as a bet on regulatory change

Beeper, the app that brought iPhone messaging features to Android smartphones, has been acquired by Automattic, the company behind, to support the development of a single service for sending and receiving chats from WhatsApp, Signal, LinkedIn and others.

The deal, worth about $125 million, was announced Tuesday. This comes as regulators in Europe and the United States pressure the biggest tech companies to open up their messaging services to third parties. Regulators believe this will make it easier for people to communicate with friends and family and switch messaging providers.

Automattic is betting that the changing regulatory environment will make people more interested in finding a unified messaging system like Beeper, said Toni Schneider, interim CEO of Automattic.

Beeper is Automattic's second messaging acquisition. Last year it bought Texts, an iPhone app that brings together messages from Instagram, iMessage and others. Mr. Schneider said Beeper and Texts employees will merge their systems into a single app that will work on iPhones and Android smartphones, as well as computers.

“Everyone has this problem where they say, 'I know I had this conversation with this person, but I can't remember where,'” Mr. Schneider said. “We think we can innovate a lot in this space.”

Eric Migicovsky, who co-founded Beeper in 2020, said Beeper and Texts will provide their combined service this year. The teams that built these companies will meet in two weeks in Portugal to begin this process.

“The real thing we competed against was apathy about new chat experiences,” Migicovsky said.

Last year, Beeper released an app that gave Android phone users the ability to send encrypted messages and high-resolution videos to iPhones. The app added more than 100,000 users in three days before Apple blocked it by changing its iMessage system.

Although a Justice Department lawsuit accusing Apple of maintaining an iPhone monopoly does not specifically refer to Beeper, the problems highlighted by Beeper's conflict with Apple were mentioned in the complaint, filed in March. The department blamed Apple for making “iPhone users less safe than they otherwise would be” by “rejecting solutions” for smartphone messaging like those provided by Beeper.

Beeper will soon be open to anyone who wants to download it after a testing period that limited the app to about 100,000 users, Migicovsky said. The company had 466,000 people on its waiting list. Around 60% of its users use Android smartphones.

Automattic was an early investor in Beeper, which had raised $16 million from investors including Y Combinator and Initialized Capital, Migicovsky said. Last week, Beeper's 27 employees officially started working at their new company.

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