Start-up CrossRider Is Sold for $37m

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After being in business just 20 months and investing $2 million in working capital, CrossRider shareholders are walking away with $37 million in cash after the start-up company was sold over the weekend.

Teddy Sagi's Markets agreed to buy the company, which develops so-called browser extensions, in an all-cash deal. Crossrider's CEO Koby Menachemi and its chief technology officer, Shmueli Ahdut, who co-founded the company in April 2011 and own more than half of it, will make more than $9 million each from the sale.

Other backers include Oren Zeev, who represents a group of angel investors; Tal Barnoach; Gigi Levy; and Michael Eisenberg of the U.S.-based venture fund Benchmark Capital.

In addition, the venture capital charity Tmura will be earning $100,000 from the sale.

CrossRider is regarded as one of the youngest companies in what has been dubbed Download Valley, which includes a slew of Israel companies such as Babylon and Conduit. These companies offer free software to web surfers, and in return get percentages of any sales generated by their bringing users to search engines, chiefly Google.

In CrossRider's case, the free software it offers is a browser extension, which opens a window when a user looks at a particular product on Amazon.com and offers it at a lower price at another website. If a sale results, CrossRider shares in the revenue. The company raised its first $900,000 in an investment round led by Zeev in July last year, the same time it launched the first version of its product. At the start of 2012, the same group of investors put another $1 million into the company.

CrossRider hit the market big and fast. By October 2011 its platform counted more than 1 million users using its browser extension, a figure that reached 140 million by last September, by which time the company counted more than 10,000 third-party developers.

Today the number has reached more than 216 million.

Color My Facebook

Among CrossRider's most popular extensions is one called Color My Facebook, which allows users to change the color of their pages on the world's biggest social network.

Although there were reportedly other offers for the company, Sagi, who founded gaming site Playtech, which he took public on the London Stock Exchange in 2006, wound up negotiations with CrossRider in just three weeks.

Menachemi served in the Israel Defense Forces 8200 technology unit and was CTO for the financial website Seeking Alpha. Before CrossRider, he formed two other companies, Ceedo and Navicula.

The CrossRider staff.Credit: Eyal Toueg

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