Blackstone to acquire Ancestry

Question

According to this article in today's Genealogy a la Carte, the private equity firm Blackstone is going to buy Ancestry for $4.7 billion.

Update:  Roberta Estes has written about this today too, at her DNAeXplained blog.

Another update:  Here's a link to Ancestry's own blog announcing the sale (I'm not sure if everyone can access it).

Comments

One more perspective, this one from Judy Russell, "The Legal Genealogist":

Business as usual

Answer 1

My husband announced this to me before I even got out of bed this morning . . . 

Blackstone is acquiring a 75% share, while current investor GIC will maintain a 25% share.  See Blackstone's press release here.

This makes me wonder if any changes will be made with ancestry (besides the ones we already are dealing with as far as eliminating smaller cM matches).  I always hope and imagine the day when they give us what all of the other DNA testing companies already provide -- a chromosome browser.  As I've mentioned previously, I would be happy to pay a fee to have this 'tool' available -- along the lines of the Tier 1 utilities offered by Gedmatch.  It would bring them in additional revenue, and it would really pop the lid off of our tens of thousands of matches that many of us have at ancestry (over 111,000 for my dad).

Comments

Darlene, what caught my attention was that Blackstone was interested in pursuing the health care-related DNA business (as Michael alludes to below).  I have previously read that Ancestry believes only a very small percentage of its DNA users care about chromosome detail.  From what I understand, many private equity acquisitions are made with the intention of streamlining companies to make them more profitable and then selling them.  All those things lead me to think it extremely unlikely that we will get chromosome detail out of Blackstone.  (I would pay for it too, at least a reasonable amount, but I wonder if the cost of providing it, divided by the number of users who would pay, could possibly be reasonable.)

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Yes, I know that ancestry seems to think that.  Even if only a million of us were interested in a chromosome browser, and they charged us $5/month for it, that's not a small chunk of change we're discussing . . .  Drop that number in half, and it still would generate $30 million annually.

Ancestry started offering DNA health tests last year.

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Ancestry now has three million paying subscribers according to their own website.  To my surprise, I found the source of my comment about the small percentage of subscribers who would want chromosome detail.  It was a 20 February 2019  post to Randy Seaver's Genea-Musings blog, and the estimate was 2-4%.  Even 4% of three million is only 120,000.  And $60 a year may seem like a lot to many people, especially on an ongoing basis.  I might be tempted to pay for a month or two, spend the entire time studying my matches, and then terminate the additional service.

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While they have 3 million paying subscribers, they have a much larger DNA base (what is it -- 18 million?). Most people that tested at ancestry that don't have a paid subscription.  They could offer a 3 mo, 6 mo, and 1 yr subscription, charging more for the shorter terms (just like they do with their membership).

I have to ask where they came up with their figure for the number of people that would want chromosome detail.  We all know that you can skew survey results to show whatever you want the result to be.  

To me the real question is:  Why doesn't ancestry provide the choromosome browser?  All of the other DNA firms provide it and have a much smaller database...  It can't be because of the cost.

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Well, as I understand it, the huge size of their database is exactly the problem.  They don't have the processing power.  That's what's been suggested to me by others who know more about such things than I do.  Maybe someone with more expertise can comment here.

P.S.  My own experience with trying to get Ancestry matches interested in chromosome detail doesn't contradict the 2-4% estimate.  Nor does my experience, or that of others I've heard about (including on G2G) suggest that a large percentage of Ancestry's DNA users care about chromosome detail, or even their matches, or anything except their ethnicity.

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Logically, the ongoing matching for one-to-many is the culprit. If Ancestry just provided the chromosome data for each customer to match on a one-to-one, ad hoc basis only, I don't see a database or CPU scaling problem. i.e. see match's tree, matches in common, chromosome overlap. That would have significant utility and allow millions of Wikitree DNA confirmations out to more distant cousins.

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Exactly, Mike!  

Answer 2

The rate of DNA testing for genealogy has actually slowed significantly in the past year.  Also, Ancestry's model of "pay to see other users' trees" and "pay to see the sources" is a loser in the long run.  Not only are there more and better free trees at FamilySearch, Wikitree, and Geni--there are more and more free primary sources coming online all the time.  The Ancestry "pay per month" model won't be able to compete.  I reckon that Blackstone, who invest mostly in healthcare, will attempt to leverage Ancestry DNA. This acquisition may signal the beginnings of a shift away from family history and towards DNA-based healthcare services.  In this realm, they'll have some catching up to do to compete with 23&Me and myHeritage (who acquired Promethease last year). On the other hand, Ancestry does have the biggest DNA database.

Comments

Your last sentence, to me, is the most important one (just from my interest!).  They have the largest DNA database, yet they don't provide us with the one tool that genetic genealogists need . . .  

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I agree. I had an account with them for a bit, but the price (I'm a cheapskate) and the difficulty in trying to correct other people's errors led me to drop it. I can get most of what I want at FamilySearch for free.

I am thinking of testing the newspaper subscription, at least for 6 months. See if it's better than the free national archives.

Answer 3

Given the known business model of private equity firms in general and Blackstone in particular I would expect to see much more monetizing of assets in the near future - and in the long run I would wonder about the future of non-genetic genealogy at Ancestry. How much more money than they do already can they squeeze out of "old records"?

Comments

Three million paying subscribers, at $200 per year or more (I pay around $300) isn't anything to just throw away, is it?

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Assets under management: 571 billion USD

Ancestry subscriptions provide chump change.

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"How much more money than they do already can they squeeze out of "old records"?" And squeeze out of old subscribers and employees. . . 

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Ancestry does own Find-a-Grave, I wonder if they might charge for that now?

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My understanding is that Find-A-Grave is to always remain free (like WikiTree).

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"always" is probably too generous since the data outlive the corporate or other container they are put into... who owns the data?  they do after you input it and they decide pay-gate or not at any time, regardless of prior terms and conditions

Answer 4

I'm sharing some information that I received from our local genealogical society DNA SIG today. Some of it may be redundant. 

• Bloomberg.com reported yesterday that “Blackstone Group Inc. acquired a majority stake in Ancestry.com Inc., the business known for family history research and DNA testing.  The deal is valued at $4.7 billion, Blackstone said in a statement Wednesday. It’s the first acquisition by Blackstone’s largest ever private equity fund.  Silver Lake, and Singaporean sovereign-wealth fund GIC Pte  have been the majority owners since 2016. After the deal closes, Blackstone will own about 75% and GIC will still hold about 25% of Ancestry.com, said people familiar with the matter, who asked not to be identified because the information is private.”
   
• An interesting perspective on Ancestry.com and the Blackstone acquisition from Roberta Estes: 
  https://dna-explained.com/2020/08/05/blackstone-group-acquires-majority-interest-in-ancestry-com/
   
• Ancestry announces their new AncestryHealth offering: 
  https://www.ancestry.com/corporate/newsroom/press-releases/ancestry%C2%AE-launches-ancestryhealth%C2%AE-powered-next-generation-sequencing-ngs?mc_cid=da6c8420b4&mc_eid=ca554ded02
• And and article in the New York Times about the GEDmatch data breach: https://mail.google.com/mail/u/0/?tab=wm&ogbl#inbox/FMfcgxwJXLfpcRCGQpqmJCwXfdBPZxnJ?projector=1&messagePartId=0.1

Answer 5

Here is the link to another discussion about this on WikiTree:

https://www.wikitree.com/g2g/1085384/did-you-see-that-blackstone-group-bought-ancestry-com

Comments

Thank you, Tommy.

Edison Williams's answer on that thread is particularly worth reading.

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(Sorry, Julie. I saw the other topic because it was tagged "DNA"...but yours actually posted before that one. Well, on second thought, the result did save your question from having an extra 1,300 words of extemporaneous clutter...)

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Paste it here too and I'll give you another star!  

Answer 6

Whats for Dinner ..  

(Humor)