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 a tour, Japhet said, “How long do you have? Because when I get going, it’s hard to stop.” He’s not kidding. He also took the liberty of giving me a bigger notepad. I think I asked one question, but mostly nodded and ate the homey selection of apples, pears and bananas that was laid out for us. But I’m not sure there’s anyway to tell the story of MyHeritage quickly. It’s been a long road and little has come easily for this company. As a result, more than a few people have described Japhet as a little crazy. That’s ok. I like crazy entrepreneurs. Frequently, you have to be one to succeed.

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.”

The story of MetaCafe is one you hear over-and-over again in Israel. The company is still alive, but the founders have left, traffic has stalled, and according to Arrington at least, acquisition attempts were thwarted. In case you aren’t familiar with MetaCafe, it was a lot like YouTube, only it launched earlier. It was growing nicely when, like an Israeli cabbie, YouTube came out of nowhere and sideswiped MetaCafe. (Yes, I’m trying to make Israeli driving jokes in every post about the country. I’m actually a big fan of the taxi drivers here. I’ve arrived at meetings in record speed over the last two weeks.)

If I’ve heard about the so-called MetaCafe curse at least two dozen  times since I’ve arrived, no doubt Japhet has heard about it more. After six years of building this company, putting a strain on his family and having to give away most of his equity to keep it alive, Levene’s words were like a call to action. “He didn’t say we were going to lose,” Japhet says. “He said, ‘You’re going to work really, really hard to make sure you win.’” And as TechCrunch has reported, MyHeritage is killing Geni in traffic, and buzz-wise everyone seems more excited about Geni founder David Sacks’ newer company, Yammer. Japhet likes Yammer too. “David Sacks is a very talented guy and now I only have to compete with half of him,” he says.

I’ve always been a huge fan of Geni’s user interface, and it’s still better. But MyHeritage gives you more to do. While everyone in Israel has been in a lather about Face.com this week, MyHeritage has long had pretty impressive facial recognition software that could also tag photos on Facebook, Flickr and other sites. Again, Face.com is glitzier, but at least Japhet knows this is a weakness. This is the real reason he bought the UK’s Kindo recently. “They didn’t have a ton of assets, but they were good at UI,” he says.

It’s been a tough road for Japhet. Maybe he built the company too early. Maybe he should have focused more on the Web than a downloadable client. Maybe he should have focused more on revenues a few years ago. But there’s also an advantage when things don’t come easily for entrepreneurs: They take nothing for granted and are less likely to get sideswiped by an upstart.

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So why would a service with 25 million users would care for a small player? Probably to extend its presence in Europe with an existing team and have a plug and play service in 14 languages but also to have a comparable technology and product asset with its main new challengers: Geni.com et Verwandt (in Germany). Kindo’s product is nicely done (see below for yourself) and even better than MyHeritage’s own service. It makes sense to think that both services will merge at some point. [Update: TechCrunch UK has more on this].

Kindo was funded by TAG and Ambient Sound Investment (a fund created by ex Skype engineers)

update: it didn’t strike me when i first wrote this post but Saul Klein is both an investor in Kindo (with TAG) and in MyHeritage (with Index). I assume he was a key facilitator in that deal. If you add to that his ex position at Skype, you end up understanding that the web is a really small family, which in this case is obviously helpful (no play on words)

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The site has grown from 180 million profiles a year ago to 260 million today, they say. Registered users have also grown, from 17 million to 25 million. Compare that to almost 2 million users for Geni. 230 million photos have been uploaded to the site, which is available in 25 languages and has 5 million monthly unique visitors. Support for ten more language will be released this month.

Investors have certainly noticed MyHeritage’s stellar growth. The company has raised a new round of funding – $15 million in a Series D round led by Index Ventures and joined by current investor Accel Partners. That brings their total capital raised to $24 million.

New Features – Recognize Those Faces

MyHeritage’s facial recognition, which works a little like recent Picasa enhancements, lets you train the service by tagging a few photos of an individual. MyHeritage then starts to auto-tag other photos that you upload of that person, too. Users don’t have to upload photos directly, either. They can sync from Picasa, Flickr, Facebook, etc. And once the photos are properly tagged with people’s names, MyHeritage will re-sync them back to the original services.

Just to reiterate that, MyHeritage has created a heck of a tool to let users auto-tag photos with people’s names on the services they already use.

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In August the inevitable German clone launched. The clone, called Verwandt.de is a near carbon copy of Geni.

But unlike most clones, which never do as well as the original application, Verwandt is growing at nearly twice the rate that Geni is. In Verwandt’s first five months, CEO Sven Schmidt says they have spread to six languages (German, Polish, Italian, Portuguese, Spanish and English). One million family trees and 9.5 million profiles have been created (4.5 million more profiles than Geni’s first five months).

They’ve cannibalized a lot of early adopters in the Europe and South America with strong execution in localized markets and languages. Verwandt is even taking on Geni on its home turf. They’ve just launched in the U.S. under the domain ItsOurTree. Same design, different words.

Geni’s simple Flash interface was an innovation among genealogical sites (see our coverage of established competitors like MyHeritage and Ancestry.com). Verwandt is nothing more than a blatant rip of of Geni. But they are executing perfectly, and those 9.5 million user profiles are likely gone for Geni forever. Verwandt’s success means other clones will pop up even quicker than befoe. And that means startups need to think about international strategies right at the start, perhaps even before launch and before the application is proven.

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Israeli startup MyHeritage was a bit of a sleeping giant. Until newcomer Geni came along and shook up the genealogy world with its slick new viral family tree application. Geni quickly reached 5 million people profiles and a monster $100 million valuation just a few months after launching.

MyHeritage has been around since 2005. They’ve quietly raised $9 million in venture capital (about half from Accel and half from two angel investors, Yuval Rakavy and Aviv Raiz). Until recently MyHeritage required users to upload family genealogy information from desktop based software. The information was viewable online but no changes could be made. An unwieldy system, but they still managed to gather 150,000 family trees with 180 million people profiles from 17.2 million users. 150,000 new profiles are added daily. That dwarfs Geni, although MyHeritage had a long head start.

A couple of weeks ago MyHeritage unveiled a number of fundamental architectural changes to their service. They’ve taken the best features of Geni and married them to the stuff at My Heritage that has worked over the past couple of years.

Users can now upload data (name, email, born/died dates, photos, etc.) directly on the MyHeritage website in addition to the client, choosing from17 different languages. The user interface, which like Geni is in Flash, shows a couple of different views to quickly move around a family tree. Over 100 million photos have been uploaded to the site, and users can tag faces with names an attach them to user profiles.

That isn’t all MyHeritage is up to, though. They acquired Pearl Street Software late last year. That acquisition brought matching technology to the company which allows the service to compare family trees to find overlap – even if names are spelled differently or the basic data is somewhat off (slightly different birth or death dates, for example). They are just beginning to roll out the matching service, but they expect to see a lot of overlap between family trees. If both sides agree, the trees can be merged at appropriate places.

MyHeritage hopes, like Geni, to one day have much of the world’s genealogy mapped online. Given that 1 billion people are online today, MyHeritage’s 180 million people profiles is a good starts towards reaching that goal. They eventually hope to have 3 billion profiles, including people who’ve passed away. And at that point the family relationship between any two people in the world is just a mouse click away.

It’s a grand vision, but one that is likely to be achieved someday by MyHeritage or one of their competitors.

As an aside, MyHeritage also has a robust (and free) genealogy metasearch engine that taps into 1200 genealogy databases around the world.

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The addition of the team and products put the company in a better position to deal with upstart Geni, which announced over 5 million profiles in 5 months in July. They’ve also been getting a great deal of the press. However, Geni still has a long way to go when taking on the established ancestry industry. MyHeritage has a large lead on the site with over 10 million registered users of their site. Ancestry.com, the leading genealogy site, has added 5.6 million people to their family trees this week.

As a sign of the competition, MyHeritage will now be making all the Pearl Street Software free.

Update: This acquisition actually took place in December 2006 but was not announced until now. Integrtation been ongoing since that time.

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