The story of the Tec-9 begins with a Swedish company called Interdynamic AB and their designer Göran Lars Magnus Kjellgren designing a cheap and simple submachine gun for military use. It found no interested clients, and so the company decided to market it in the United States as a semiautomatic pistol. Kjellgren moved to the US in 1979, anglicized his name to George Kellgren, and founded Interdynamic USA with a partner, Carlos Garcia.

The pair produced a few dozen MP-9 submachine guns in 1982 (they were all transferrable, as this was before 1986) as well as a semiauto open bolt version called the KG-9 (Kellgren-Garcia). About 2500 of the KG-9s were made before later in 1982 the ATF determined that it was a machine gun, and they had to redesign it as a closed bolt semiauto, which they named the KG-99. At about this point Kellgren decided to move on to other plans, and he sold his interest in the company to Garcia, who formed a new company called Intratec. Kellgren used the proceeds to start Grendel a few years later.