Francisco Partners is acquiring MyHeritage, sources say for $600M - 6 minutes read
Genealogy tracking online is a big business, and today comes some MA news for one of the bigger names in the field. TechCrunch has learned and confirmed that Israel’s MyHeritage.com — a profitable site that lets people test DNA and track their family lineage and has some 62 million users — is getting acquired by Francisco Partners, for a price that a source close to the deal tells us is $600 million.
A spokesperson for MyHeritage confirmed the deal to TechCrunch over the phone but not the price. Francisco Partners has not responded to our request for comment but we’ll update this post as we learn more.
From what we understand the deal will be announced officially very soon. Update: We now have received a press release, so I guess that makes it “official.”
The market for DNA tests and genealogy research is generally a very fragmented one, but within that MyHeritage has been an early player — it has been around since 2003 — and a prolific one at that.
In addition to its 62 million active users of its site — which is available in 42 languages — it also has a database of some 13 billion historical records. Users have built and expanded on some 58 million family trees on its platform. It’s also run nearly 5 million DNA tests for its users.
Pricing for the service starts at free for limited use and goes up in several increments starting at $129/year through to $319/year depending on usage and features that you want to use. DNA kits cost $59.
The deal is a confirmation, if one is needed, that the hunting down of DNA lineage and family trees — perennial hobbies for people looking for more links to their histories — can be big business.
“When I founded the company from my home 18 years ago, I had a clear vision that drove me, and continues to drive me today — to make family history discovery easier using technology and to unlock the fun in genealogy: the human pursuit that bonds people,” said Gilad Japhet, founder and CEO of MyHeritage, in a statement. “With the help of an excellent and dedicated team, years of hard work, and with constant technological innovation, we created new and exciting ways for people to learn about their origins.
“In Francisco Partners we see a true partner for our journey ahead, not only demonstrated by the trust they are placing in our company through this acquisition, but in their desire for us to remain true to our vision by continuing along our path and helping us do what we do best — putting our users first and giving them life-enriching, and sometimes life-changing, experiences. This move will enable us to reach new heights, invest more resources in creating greater value for our users and to reach a larger audience. We’re incredibly excited for this next chapter in our company’s evolution.”
Indeed, while MyHeritage is already profitable this deal represents a moment for the company (and its new owner) to double down on investing in what it does already and expanding its services to the next level. It has grown in part through some 11 acquisitions to date, so making more consolidating purchases might be part of that.
It will also hopefully include investment in its cybersecurity.
MyHeritage has had a colorful, not always positive, profile in the public eye. It emerged as a key player in solving one of the most elusive murder cases in decades, the hunt for the Golden State Killer.
But is has also been the subject of a major data breach, compromising some 92 million accounts in 2018. Account details of some MyHeritage users were part of a huge trove of personal details — collated from a number of breaches of several sites — that were posted for sale online in 2019.
It also runs pro bono work including DNA Quest, for adoptees to find their biological families; and Tribal Quest, to help document the family histories and cultural heritage of remote tribes around the world. It has been running a COVID-19 testing lab in Israel as well to better track the spread of the coronavirus.
The deal is coming at a time when another major DNA player, 23andme, is going public by way of a SPAC at a valuation of $3.5 billion.
Although a significantly smaller sum, $600 million would be a really strong exit for MyHeritage, which says it has only raised $49 million in funding since being founded in 2003, with investors including Accel, Index and Bessemer.
Part of the deal will see some individual and institutional investors continuing to keep stakes in the company alongside Francisco Partners, MyHeritage said. They include HP Beteiligungs GmbH, Yuval Rakavy, Japhet and Gigi Levy.
PE firm Francisco Partners has been a prolific acquirer and investor in the tech sector, and tapping a profitable company that has more obvious growth potential is a logical move for it.
“By leveraging our operational expertise, market resources and strong industry networks, we believe Francisco Partners is uniquely positioned to help MyHeritage accelerate its vision for growth. We are deeply impressed by the incredible achievements and relentless determination of Gilad, a visionary leader in genealogy who has grown the company from a startup to a profitable global market leader,” said Eran Gorev, Francisco Partners‘ president of Israel and senior operating partner, in a statement. “We are looking forward to partnering with Gilad and the entire MyHeritage team to help drive market expansion for the company.”
Gorev is joining the board along with Francisco’s Europe head Matt Spetzler with this deal.
“Francisco Partners shares MyHeritage’s vision for growth as well as its intense commitment to ensuring the privacy of its users. The users’ personal data is an extremely important priority and we will work together with MyHeritage to expand its already strong privacy framework going forward,” said Spetzler.
Updated with more detail about the deal and the company.
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