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It gained popularity because it was one of the first email clients to use curses-like screen displays, and the source code was freely available.
It was developed by David Taylor while working for Hewlett-Packard. Development later passed to a team of volunteers. It last made a public release in 1999.
Other popular email readers which followed--and were inspired by--Elm include the Mutt and Pine programs. Pine is a (unofficial) self-referential acronym for "Pine Is Not Elm".