There are a lot of things that a person can do when they wake up in the morning with $9 million in the bank. But on such a dream morning Shmueli Achdut, CTO and co-founder with CEO Koby Menachemi of cross-browser extension developer Crossrider Ltd., which was sold yesterday for $37 million, began a spell in "miluim" army reserve duty. Israel may be a country of niche-oriented start ups, and you may be the hot story of the week because you've just sold the company you founded 20 months ago, and you have 217 million users, but when the IDF calls, you go.
Thus what was meant to be an interview with both founders became a one-on-one interview instead with Crossrider CEO Koby Menachemi. Based in an old Tel Aviv apartment with a living room, kitchen and small balcony overlooking Lillienblum Street close to the start up boulevard on Rothschild Boulevard, Menachemi and Achdut managed to sell their start up to Teddy Sagi's Markets.com, one of the world's major forex traders.
Menachemi, 35, and Achdut, 30, founded Crossrider in April 2011 and within two months had closed seed round financing led by Oren Zeev and other angels. They met Zeev ("an amazing guy with sharp insights") through Benchmark Capital general partner Michael Eisenberg, who himself invested in Crossrider and indirectly assisted Menachemi and Achdut in getting to know the Seeking Alpha financial website.
Eisenberg had invested in the stock market news and financial analysis site through Benchmark and brought Menachemi there as CTO and VP R&D after meeting him at a previous start up that the Israeli had founded but in which Eisenberg had declined to invest. Menachemi came in because Seeking Alpha was in dire straits.
Menachemi recounts, "We were on a salary but even so we slept for a month in the office just to solve the problems. It was like the army with mattresses."
When Menachemi came to Seeking Alpha he sought new employees and received the curriculum vitae of Achdut. "He had zero experience but there was a special passion in his eyes and I said I'd hire him and teach him what he needed to know. He quickly became my number two and was due to replace me when I left."
The pair, with the encouragement of Seeking Alpha CEO David Jackson, decided to both leave and set up Crossrider. And the rest as they say is history. The road to success for the platform, which provides cross-browser extensions for all major browsers (Explorer, Chrome, Firefox, and Safari) was relatively short.
Fitting like a glove
Crossrider's website, which has 217 million users, is presented on a large TV screen in the start up's living room ("we bought the TV for the Euro 2012 soccer finals and today it is like a banner of our success, said Menachemi). Each day one million new users join the site as well as 14,000 developers who use the company's code to produce successful new additions and generate revenue worth hundreds of thousands of dollars.
These numbers even surprised Menachemi and Achdut. "When we raised financing at the end of July 2011, we forecast then that we would reach 5,000 developers and 5 million installs. A year later we had reached 10,000 developers and 100 and something million installs."
Despite this success, Crossrider mainly operated beneath the radar, raising the question how did two young "thirtysomethings" attract the attention of Teddy Sagi.
Menachemi and Achdut had no intention of selling the company despite receiving offers along the way including from several US internet companies. "The problem with these other offers was that it required relocating and changing the focus of the company. Market.com's offer fit like a glove," Menachemi explained.
The deal went through relatively swiftly with initial contact from Sagi at the end of November. Negotiations were completed within three weeks and the deal was signed last Friday afternoon. "I naturally met Teddy himself. The chemistry between us was excellent. You meet a very successful man who you only know via the media and you imagine a rich and remote person but discover he is very nice and very sharp and quickly understands what we are doing and how we operate. It's easier doing business with someone like that."
Menachemi also talks about Crossrider's synergy with Markets.com. "The company has some products based on extensions and I hope we can strengthen them from a technical point of view and unify forces in development. Markets.com has a very large network of sites in Germany and we can, for example, help in extensions comparing prices."
Why I decided to sell 20 months after founding the company
He said, "We looked at four factors. How would Shmueli and I exit from this, how the employees would exit, how the investors would exit, and what in fact were we selling. So we exited well. The employees are very very satisfied, the investors made phenomenal returns, and we think we are selling the company at an excellent price. I'll be happy if in another three years the people at Markets.com say they did a good deal."
And how does it feel to be $9 or 10 million better off?
"I've dreamed my entire life of making an exit but it makes no difference how much money there is or isn't in the bank it's a sign that you've done something, and you've succeeded and people recognize that. I don't know of many Israeli or foreign companies who have had 250 million people download their software based on their technology.
Until two in the morning
The Menachemi family made no big deal of the fact that their youngest made a quick exit and put $9 million in his pocket. He said, "I was on the way to Afula when everything was closed. I told my parents I'd sold the company but gave them no details about figures. My father immediately asked, Hold on, you put down a deposit on a new apartment, will you still have money for the apartment?' But money wasn't really part of the subject. I didn't come and say that I'm a millionaire but just that I'd succeeded with the company."
In fact the main pleasure derived from the deal for the parents is not the success of their son but that he and his two daughters will remain relatively close to them in Afula. Before the exit, his parents did not fully understand why he had decided to be independent and set up Crossrider. He said, "My parents greatest fear is that of those who work decades at the same place, was when I decided to leave Seeking Alpha. They said, "Why are you leaving when you have a prestigious position and good salary? That's what they asked then. Hopefully they've calmed down today."
And what about celebrating the exit? Apart from a bottle of beer that the two founders drank yesterday, the focus at the moment, just to be different, is on hard work. "We stayed up until two in the morning to finish a new version that we needed to complete," said Menachemi who celebrated modestly by taking his wife Chen out for a meal. "I hope that on Tuesday the entire company will celebrate after we finish work on the new version. It may sound strange but you can't go out to celebrate until you've solved all the problems when there is a little bug that affects almost a quarter of a billion people."
Published by Globes [online], Israel business news - www.globes-online.com - on December 17, 2012
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