Francisco Partners to Acquire MyHeritage for $600M

MyHeritage.com Acquired by Francisco Partners for $600 Million

The online genealogy industry is experiencing significant activity, as evidenced by a recent merger and acquisition. TechCrunch has confirmed that MyHeritage.com, an Israeli company offering DNA testing and family lineage tracking services, is being acquired by Francisco Partners.

Deal Confirmation and Details

MyHeritage.com, which boasts 62 million users and operates profitably, will be acquired for a reported $600 million, according to a source familiar with the transaction. A MyHeritage spokesperson verified the deal to TechCrunch, though refrained from disclosing the exact price.

Francisco Partners has yet to issue a public comment, but further details are anticipated shortly. A press release has now been issued, formally announcing the acquisition.

MyHeritage: A Leading Player in Genealogy

MyHeritage has established itself as a prominent player in the fragmented market of DNA tests and genealogical research. Founded in 2003, the company has consistently expanded its reach and services.

User Base and Historical Records

The platform currently serves 62 million active users across 42 languages. Furthermore, it maintains an extensive database containing approximately 13 billion historical records.

Users have collaboratively constructed and expanded over 58 million family trees on the platform. The company has also processed nearly 5 million DNA tests for its user base.

Service Pricing

MyHeritage offers a tiered pricing structure, beginning with free limited access. Paid subscriptions range from $129 per year to $319 per year, depending on features and usage. Individual DNA kits are available for $59.

Significance of the Acquisition

This acquisition underscores the substantial commercial potential within the genealogy and DNA lineage research sector, a popular pursuit for individuals seeking deeper connections to their family histories.

Vision and Future Growth

Gilad Japhet, founder and CEO of MyHeritage, expressed his enthusiasm for the partnership. He stated the company’s vision is to simplify family history discovery through technology and enhance the enjoyment of genealogy.

Japhet believes Francisco Partners will be a valuable partner, enabling MyHeritage to remain true to its core values and invest in user-centric innovation. This move is expected to facilitate expansion and provide enhanced value to users.

Investment and Consolidation

The deal represents an opportunity for MyHeritage and its new owner to invest further in existing services and explore new avenues for growth. Having already completed 11 acquisitions, the company may pursue additional consolidating purchases.

Investment in cybersecurity measures is also anticipated.

Past Achievements and Challenges

MyHeritage has a notable public profile, having played a crucial role in solving the decades-long case of the Golden State Killer.

Data Security Concerns

However, the company has also faced challenges, including a significant data breach in 2018 that compromised 92 million accounts. In 2019, compromised account details were included in a large collection of personal data offered for sale online.

Commitment to Data Privacy

MyHeritage maintains that it does not sell or utilize user data and is updating its privacy policy to explicitly prohibit the licensing or sale of genetic data to third parties. This commitment is shared by Francisco Partners.

Social Responsibility Initiatives

MyHeritage actively engages in pro bono initiatives, such as DNA Quest, assisting adoptees in locating biological relatives, and Tribal Quest, supporting the documentation of cultural heritage for remote tribes.

The company also operated a COVID-19 testing lab in Israel to aid in tracking the spread of the coronavirus.

Industry Context

This acquisition occurs alongside 23andMe’s planned public offering via a SPAC, valued at $3.5 billion.

Strong Exit for MyHeritage

The $600 million deal represents a substantial return for MyHeritage, which has raised only $49 million in funding since its founding in 2003, with backing from investors like Accel, Index, and Bessemer.

Continued Stakeholder Involvement

Certain individual and institutional investors, including HP Beteiligungs GmbH, Yuval Rakavy, Gilad Japhet, and Gigi Levy, will retain stakes in the company alongside Francisco Partners.

Francisco Partners’ Strategic Investment

Francisco Partners, a prominent private equity firm, has a history of acquiring and investing in technology companies. Investing in a profitable company with growth potential aligns with their investment strategy.

Partnership and Future Expansion

Eran Gorev, president of Israel and senior operating partner at Francisco Partners, expressed confidence in MyHeritage’s vision and leadership. He believes Francisco Partners can accelerate the company’s growth through operational expertise and industry resources.

Matt Spetzler, Francisco’s Europe head, will join the board alongside Gorev.

Prioritizing User Privacy

Spetzler emphasized the firm’s commitment to user privacy, stating that they will collaborate with MyHeritage to strengthen its already robust privacy framework.

This article has been updated with additional details regarding the deal and the company.