Wow! $30M Series A for a People Search CompanySeptember 01, 2010
by Connie Loizos
It’s easy to laugh off a $30 million Series A round for two largely unproven young entrepreneurs, in a space where there are a great many small players as well as large ones. But then, you might make the same mistake that industry observers first made about Google and Facebook.
And Brian and Matthew Monahan, the 23- and 26-year-old brothers behind 4-year-old Inflection, don’t want you to feel silly years from now if their company accomplishes what it’s setting out to do: transform the public records industry and become the go-to place for people search.
While you can find out plenty about people via search giants like Google and Yahoo — and despite a succession of other sites like PeopleFinders.com and PublicRecordFinder.com that make it easier to find public records online — the Monahan brothers say they’ve already compiled so many public records that any firm that tries to catch up now will be eating their dirt. It’s a claim that Matrix Partners and Sutter Hill Ventures plainly agree with.
Matrix led the company’s Series A, giving it $15.25 million, while Sutter Hill Ventures chipped in another $14.75 million. (The company isn’t disclosing its pre-money valuation, though the brothers say they are “happy with it” and that they raised as much capital as they did because they didn’t want to seek out a second round any time soon.)
Inflection launched four years ago as an e-commerce service called Archives.com, which aggregates historical information such as obituaries and vital records for customers, who pay it $39.99 for a yearly subscription. The brothers won’t disclose how many people have signed up for the service, but they say the site sees 2 million unique visitors each month and that their 75-person company is profitable. (Half its business comes from one-time purchases; the other half comes from memberships. Inflection also generates revenue by hosting advertisements at the site.)
Yet Archives.com is just phase one of a larger plan. The Monahans are now using the vast pile of data they’ve been acquiring to build out a platform to launch other people-search businesses, the second of which will launch tomorrow and is called PeopleSmart.com. The new site is designed for people in search of information on their contemporaries. (Like Archives.com, customers can retrieve records for a one-time fee or by purchasing a yearly membership.)
Indeed, if you don’t want to be found, you’d better visit the service tout de suite and opt out of it.
Using more than 100 data providers that have quietly been providing the industry with digitized records for years, Inflection has already culled more than a billion historical documents, including obituaries, vital records, newspaper articles and census records for Archives.com. For PeopleSmart, it has assembled more than 500 million contact information listings, court records and civil records, along with roughly 250 million social profiles, based on the same information that’s publicly available to all search engines. And “we’re less than 10 percent of the way to where we’re headed,” says Matthew Monahan.
“That’s why we’re raising capital,” he says. “We’ve [purchased] access to a lot of data, but there’s a lot more and it’s like [drilling for] oil: It gets more expensive as you go.”
The Monahans know that privacy concerns will still be an issue, and understandably so. The people-search industry has already been ensnared in at least one major scandal, thanks to Seattle-based Intelius, which sells background information about people and earlier this month agreed to pay $1.3 million to the Washington attorney general after consumers complained that they were tricked into signing up for a $20-per-month online identity-protection program after conducting their searches.
The brothers insist that privacy is “one of the key tenets” of their business. Archives.com members who contribute information in tracing a family tree, for example, needn’t worry that what they add will be available for anyone else to see, says Matthew Monahan. And PeopleSmart won’t “publish income, ethnicity, credit scores, social security numbers -– we won’t even publish a full email address,” he says. Nor will it sell any data to third-party marketers, he adds.
Still, in light of privacy concerns around Facebook, it’s not hard to imagine people’s discomfort with yet another new service that puts on display personal information about them — unless they know to opt out of it. Stay tuned.