Ancestry Traces Roots of $33M Venture Deal

Ancestry.com Inc. Chief Executive Curt Allen believes every one of the two billion families on earth is a potential customer of his company, which creates Internet properties that enable family members to connect with each other.

“All those [families] that are wired are natural candidates,” Allen said. “Family connections are more persistent and more compelling than communities of friends that live online.”

A high-profile syndicate of strategic and venture investors concurs, as Ancestry.com late last month raised $33.2 million in its second round of financing.

Boulder, Colo.-based investment firm Tango led the oversubscribed Series B round, investing approximately $11 million, said partner Jerome Contro.

Additional first-time investors include Group Arnault, Pivotal Asset Investment Management LLC, Amerindo Investment Advisors Inc., as well as strategic investors America Online Inc. and Compaq Computer Corp.

First-round investor @Ventures, the venture affiliate of CMGI, returned at pro rata. Last December, @Ventures led the Orem, Utah-based company’s Series A round, which also included investments from Intel Corp. and Wasatch Venture Fund Inc.

Founded in 1984 as a publisher of family-history journals and periodicals, Ancestry.com recently launched its Internet properties, which also include MyFamily.com and FamilyHistory.com. The Ancestry.com site hosts more than 1,700 family databases that contain nearly 280 million records.

“We launched our Internet assets a few years ago without any private equity,” Allen said. “We raised financing [now] because we felt there was an opportunity to create the largest, most active family site on the Web.”

Allen, who joined Ancestry.com just prior to the Series A round, was formerly vice president of strategy for Opensite Technologies Inc. an Internet auction software developer.

Proceeds from the financing will be used for content acquisition, infrastructure and sales and marketing costs.

“We want to offer a message that appeals to non-traditional computer users,” Allen said. “Some of our users have signed up with an ISP just to use our site.”

Allen offered no details on Ancestry.com’s future financing plans, although he did indicate that the company would eventually go public.