Bootstrapping Band of Brothers Raise $30M for People Search Engine InflectionSeptember 01, 2010
by Matthew Lynley
Brian and Matthew Monahan weren’t quite sure how to raise venture capital funding, so they built Inflection from scratch and made it profitable with its first website for searching public records, Archives.com.
Now, they seem to have a pretty good fix on it: Inflection is poised to announce it has raised $30 million in its first round of funding, led by Matrix Partners and Sutter Hill Ventures, for the launch of its second foray into public-records search engines.
Inflection’s PeopleSmart.com, which will launch Thursday, focuses on public records of living individuals — names, addresses and the likes. All the data is aggregated from public records, social media and contact information. (Archives.com focused on a more scattershot approach of all public records.)
The service is sold in two ways: one-time purchases from $1.95 to $39.95, and a continuing subscription for as little as $2.95 a month. Matthew Monahan (above, right) said the one-shot purchase model wasn’t the most “sexy,” because he wanted to retain customers over the long term, not cater to one-off searches. An annual subscription with full access to background reports costs $35.40, and the Monahans hope to lower that price over time and offer more services.
One of those in the works is a court-runner service, which users can request specific court documents for legal proceedings and the like. Monahan said Inflection can bypass a lot of the extra governmental costs and charge users $20 to deliver the documents in an average of about 38 hours.
About 50 percent of the users already active on Archives.com are subscribing members with a good number of annual renewal rates, said Josh Hannah, a general partner at Matrix.
Based on Inflection’s previous success, Hannah said he didn’t expect it to raise more money — at least in the immediate future.
“Despite it being a very large check, $30 million series A funding, not for a second were we worried they were going on a spending spree,” he said. “It’s very possible we hardly touch the cash we put in, they’re a profitable business that was only getting more profitable.”
While privacy is typically a sore point for some of these data-oriented public record search engines, Matthew said PeopleSmart.com offers a simplified opt-out method. Even then, the percent of users who opt out is usually in the single digits, he said. Any information integrated from a social network is also linked directly to the network instead of housed in-house.
Inflection was founded in 2006 while Brian Monahan was still at Harvard developing the idea, he said. The two eventually moved out to Palo Alto in January 2007, where they now host 40 of their 75 employees. Its main competitors include publicly traded Ancestry.com. Intelius, another rival, acquired a smaller people-search site, Spock.com, in 2009.