Sarah Lacy posted a fascinating story of israeli startup myheritage on techcrunch.
BNEI ATAROT- In case you don’t recognize it, that dateline is the name of a small village about forty-five minutes from Tel Aviv. Don’t worry, my concierge hadn’t heard of it either. It may actually have more roosters than people living there. But tucked away, in a hundred-year-old house built by German Templars is one of the most exciting Web companies in Israel: MyHeritage
. It’s also completely outside of the Israeli Web “scene.” I’ve never seen founder Gilad Japhet at any of the Web mixers, and I’ve never gotten a pitch from his PR people. In fact, I had to do a bit of hounding to get a meeting.
But don’t be fooled by the low-profile: MyHeritage is boasting some of the best numbers of any Israeli Web startup. It’s got 31 million registered users, who have documented 330 million family members, some living and some dead. The company has been backed by blue chip investors Accel Partners and Index Ventures. And Japhet told me on Monday, the company is starting to bring in real revenue from premium services and eCommerce transactions. (Think: sending flowers and candy to your parents for their anniversary). Japhet admits the company should have focused on this earlier, but says the lean operation should be break-even by the end of the year.
After all, when he started MyHeritage no one was interested in a mainstream Web genealogy startup. He bootstrapped the company for years, mortgaging his house and begging a German company for free access to its facial recognition software. He was turned down for venture capital so many times, when he finally got a small round from prominent Israeli angels, he had to give up a lot of equity. “Have you ever heard this word ‘Chutzpah?’” he asked smiling.
It’s not that Japhet is modest: He clearly crowed over MyHeritage’s technology and other things he believes he’s done well. But he openly admits where he has struggled. One of the most pivotal events in his company’s history: The launch and monster $100 million valuation of competing site Geni.com. On one hand, it legitimized the space. But as his investor Simon Levene of Accel told him, “Be careful what happened to MetaCafe doesn’t happen to you.”
If you are entrepreneur, it is a good read. MyHeritage has the coolest HQs I have seen.