MyHeritage CEO: Our acquisition rewards our workers and helps us grow
The genealogy testing company was just acquired by US investment firm Francisco Partners for an estimated $600 million.
By ZEV STUBMyHeritage's management team(photo credit: Courtesy)
US investment firm Francisco Partners has acquired MyHeritage, the Tel Aviv-based genealogy testing company reported last week.
The value of the deal was not disclosed, but market sources indicate that the price was about $600 million.
The company’s 600 employees were enjoying “disproportionately large” benefits from the sale, MyHeritage CEO Gilad Japhet told The Jerusalem Post. Utah-based Francisco Partners will maintain the company’s offices and plants in Israel and abroad, with an eye on growth, he said in a telephone interview.
“My investors never pushed me to go for an exit, but I wanted to be able to give something back to my employees,” Japhet said. “We are one of the oldest Israeli start-ups that hadn’t done an exit until now, and we are still very innovative.”
“I didn’t want the type of exit where I would take the money and retire,” he said. “Among the conditions I had for selling were that I would continue to run the company, and that we would continue growing, reward our employees and shareholders, and aim for another exit further down the road.
“MyHeritage is my life’s work, and I didn’t want to take it public with a SPAC [special purpose acquisition company], like everyone else is doing now, or sell it to a competitor that might take it apart.”
“When I spoke with Francisco Partners, I saw that there was a good alignment between our goals for the future of the company,” Japhet said. “Francisco recently came in No. 1 on a ranking of performance by private-equity firms, and they have a lot of experience doing what we plan to do.
“The transaction wasn’t easy. It took more than a year, and some of our most bullish shareholders thought it was too early to sell. But in the end, we were able to get everyone aligned.”
MyHeritage’s platform allows users to submit DNA samples to the company using DNA testing kits, which are then analyzed and used to map out a genetic family history. It is currently used by 62 million users worldwide, who have collectively created more than 58 million family trees, the company said.
It is the largest service of its kind in Europe, and one of the most popular in the United States, although it isn’t available in Israel due to local regulations, Japhet said.
The MyHeritage site is available in 42 languages and has one of the largest databases of DNA records in the world, with some 4.8 million customers, the company said. The platform’s features also include tools for colorizing and enhancing historical photos using artificial intelligence.
“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,” Japhet said in a press release. “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.”
The company has also gained recognition in the past year in Israel, as it used its facilities to set up a COVID-19 testing lab to help with the nation’s battle against coronavirus. That unit, which has 150 employees, was not the focus of Francisco Partners’ interest in the company and played a marginal role in the acquisition, Japhet said.
Since its inception in 2003, MyHeritage has raised $49m. in five rounds of financing, the last taking place in 2012, after which the company became profitable. The company has acquired 11 other companies since it was founded.
Most of the company’s developers are based in Israel, along with a strong team based in Ukraine and some located in the US from some of the businesses it has acquired, Japhet said.
The company’s investors have included private investors Yuval Rakavy and Aviv Raiz, who invested in the company in 2005 and have continued to support it ever since, as well as Accel, Index Ventures and Bessemer Venture Partners.
Some of the company’s current investors will be re-investing into the company alongside Francisco Partners, including Rakavy, Japhet, HP Beteiligungs GmbH and independent investor Gigi Levy.
The project, titled “Classroom Look in Lockdown,” was first launched in the UK. It asked teachers to document their teaching environments as an artistic photographic record, while encouraging them to reflect on their own personal experience, allowing any and all interpretations.
“While we’ve all become accustomed to classes of 20 to 30 pupils accessing learning via Zoom and MS-Teams and Google Classroom, these photographs reveal what goes on behind the computer screen: the creative and dynamic effort made by teachers on the new ‘virtual frontline,’ maintaining engagement and learning for all,” Leventhall-Airley said.
The project is “not meant to compare, but to properly document experiences and the gap that has been filled,” he said, adding that it will one day help people understand the changing dynamics that the education system went through during the pandemic.
“How do you illustrate what is not there? This project amplifies the silence of absence – the somehow deafening absence of the pupils from their classroom,” according to Rogers, who served as the artistic consultant of the project.
“Every picture of an empty classroom demands that we use our imagination to fill the spaces,” he added. “These empty rooms cry out for their pupils. But one person is always present… the person who made this record: their teacher.”
The coronavirus crisis was a catalyst for changes the teaching profession would have had to go through anyway, Leventhall-Airley said. Teachers are managing those changes amazingly, he added.
Regarding criticism of the effectiveness and educational value provided by distance learning, Leventhall-Airley said people always fear change.
“If your parents told you that their experience from the classroom is the same as yours, I’d worry,” he told the Post. “Things change; they develop.”
Having started in several schools in the UK, Leventhall-Airley now hopes to expand the online exhibition to perspectives from other countries.
He intends to continue trying to “humanize the experience of teachers and students” during the coronavirus pandemic and to “provide a visual resource for teachers and pupils alike in the discussion of learning in isolation.”
