"Globes" has named MyHeritage Ltd. as Israel's most promising start-up for 2013. The announcement was made at the "Globes"-Ernst & Young Journey Conference in Tel Aviv.
MyHeritage's core product is a program for creating family trees. "We focused on offering tools for free in a wide range of languages. This gave us a foothold," says MyHeritage CEO Gilad Japhet. "It went viral, when you invited new people and relatives to the process of building a family tree."
Japhet founded MyHertage in 2005. It has raised $49 million to date from Bessemer Venture Partners, Index Ventures, Accel Partners and other investors.
MyHeritage has since expanded into the collation, collection, and digitalization of historic documents, such as old newspapers, birth and marriage certificates, and more. "This is an untapped source of information, which supplements what people know. It's accelerated in recent years, as archives around the world digitalized and go online. We've set the goal of being the leading global website, and we established a large unit in Utah to focus on this issue, in collaboration with countries and organizations, such as newspapers," says Japhet.
MyHeritage has created a search engine for historic documents, which it launched in June 2012. Three months later, it launched Record Matching, which can take historic documents in the company's database and match them with family trees. Japhet says that the service is 97% accurate. In May 2013, the company launched a complementary product, Record Detective, to link different historic documents in the database about the same person.
MyHeritage's business model is freemium based: basic services are free, while hundreds of thousands of users pay for premium services. "We're talking about annual subscriptions and renewals, which give the company a deterministic revenue engine. The recruitment rate of new subscribers is faster than the churn rate and non-renewal of subscriptions. People don’t want to lose access to their family history, and in most cases, you don’t buy a subscription for only one year," says Japhet.
MyHeritage has made eight acquisitions to date, the largest of which was the acquisition of one of its largest rivals, Geni, completed in November 2012. "Geni was in our sights for a long time, but they ultimately sent out feelers to us if we were interested in buying them," says Japhet. He adds that it was important for MyHeritage to improve its position against its largest rival in the business, Ancestry.com, and to prevent it from acquiring Geni.
MyHeritage's business expansion toward the world of apps has driven a hiring wave. Japhet wants to add 50 web and mobile developers to the company's current workforce of 150 people.
An equally fascinating field that Japhet sees as a natural fit for MyHeritage is genetics. Although this is a subject beyond the scope of the family social network, it has a link to history and the building of family trees. "We are not, naturally, involved in the medical and disease aspects of genetics, but we're very interested in the locating of relatives through DNA," says Japhet.
Japhet proposes three techniques for using DNA in genealogy: examining the Y chromosome to check the male line in families; examining the Mitochondrial DNA to check the female line in families; and a new test, autosomal DNA, which is passed down by both parents. The test involves sampling 700,000 sites on the genome to match them with relatives.
"Genetics might be an interesting future acquisition target," admits Japhet. "The field is relevant for us, and complements the products we offer that are related to human memory. There are many things which could be done later in terms of integration, and this is one of our future areas of development."
Kaiima fights world hunger
"Globes" has named Kaiima Bio-Agri-Tech Ltd. as the runner-up. Kaiima, an agro-biotechnology company, raised $50 million in September from Li Ka-shing's Horizons Ventures and the World Bank, is seeking to fight world hunger. "We're seeking to increase the world's food supply," says Kaiima CEO Doron Gal. "This was the mission from the beginning, from day one."
Gal said that Kaiima, originally called BioFuel, was thought to be focused on that industry. "When we started out in 2007, the hype was about biofuel," he says, "We were told, 'Say that you're a biofuel company, because otherwise you won't be able to raise capital.' Even the correspondents we spoke with homed like guided missiles onto biofuel.
"We stubbornly stuck to our path and said that we were more interested satisfying hunger. Investors accepted this, and I am sure that they are now pleased. We're also interested in biofuel, but the problem of fuel is farther off while the problem of food is immediate. That was always our ideology. This ideology always linked the company's entrepreneurs."
Kaiima's non-GMO Enhanced Ploidy technology multiplies the plant’s genome without compromising its basic integrity. It is developing new varieties of key agricultural crops, which are specifically designed for sustainable agriculture, and with vastly improved yields. The company has raised $92.5 million to date from Horizons Ventures, Draper Fisher Jurvetson and its Israeli affiliate DFJ Tamir Fishman Ltd., Kleiner Perkins Caufield & Byers, Mitsui Global Investment, IFC, Exalta and Infinity Group
The next eight most promising start-ups for 2013-14 are Cyvera Ltd., which develop cyber protection solutions; BillGuard Ltd., which has developed a crowdsourcing mobile app credit financial consumer protection solution; Wibbitz Ltd., which has developed an automated text-to-video product; Taboola Ltd., which has developed a content and video recommendation service; eToro Ltd., a social investment network; Moovit Ltd., a public transport trip planning app; Argo Medical Technologies Ltd., which is developing a device to help paralyzed people walk; and Taykey Ltd., a real-time customized ad campaign developer.
Published by Globes [online], Israel business news - www.globes-online.com - on October 17, 2013
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