MyHeritage.com, the company behind an online application for researching and building family trees, has raised $25 million in its fifth round of funding.

MyHeritage is also announcing that it is acquiring Geni, a rival formerly run by PayPal alumnus David Sacks, who sold his enterprise social networking company Yammer to Microsoft for $1.2 billion. That acquisition adds seven million users to its network, along with a few extra tools to the service. Sacks joins MyHeritage's board of directors.

MyHeritage's website and mobile application let users upload photos, data and other snippets of content to an online database that keeps track of a family tree. Most of MyHeritage's 72 million users follow an average of 16 family members -- but the family trees can be much bigger than that, given that 1.5 billion profiles are woven into family trees.

The basic service is free, but by paying a yearly fee, users get access to more features and additional space -- making them able to build out a more robust family tree. Adam Fisher, a partner at MyHeritage's newest investor Bessemer Venture Partners, likens the hobby to hardcore gaming, except the part where players move on from one game to the next. Here are a few of the stats, for example:

On average per month, 72 million users spend eight hours on the site and log in more than 40 times

1.25% monthly churn -- meaning there isn't a lot of turnover among users

Eight acquisitions since launch, including Geni

Essentially break-even for this previous year after raising $15 million in funding in 2008

MyHeritage also sells a few extra premium services, like DNA tests that will find family members as far back as 500 years.

"We're fond of consumer businesses that sell something to customers rather than push ads to them," Fisher said. "We especially appreciate consumer businesses that have mastered the freemium model or have a network effect. Those are two criteria with which we consider you need to have a sustainable business."

Bessemer Venture Partners led MyHeritage's new funding round, joined by existing investors Index Ventures and Accel Partners. The financing comes on the heels of a $1.6 billion leveraged buyout of rival Ancestry.com.

We spoke with MyHeritage CEO Gilad Japhet for a quick update on the site, and what the Geni acquisition means. Here is an edited transcript of the interview:

WSJ: Can you tell me a little bit about MyHeritage?

Gilad Japhet: The basic unit is a family website. It's not a personal profile like Facebook or LinkedIn. When you buy a subscription it covers you and your family members. Your family members don't have to pay--only the one person who buys the subscription. The average subscriber has 16 invited family members to share with.

WSJ: How is this different from Ancestry.com ?

GJ: Ancestry and other competitors were never about collaboration. Another point is being global. It's largely a product of us being from Israel. Our service runs in 40 languages. If you are a Swedish user, we'll have a Swedish employee talking to you and answering your emails, and not translating everything to English. The business model is also unique, we were the first family history company to provide its products for free. Then we evolved into a freemium model and added freemium features.

WSJ: How big is MyHeritage.com?

Gilad Japhet: We now have 72 million registered users, including Geni, which contributed 7 million. We use the term profile to indicate information entered by someone else -- of those, we have 1.5 billion. The differentiation is a lot of those profiles are deceased people--it's about 50-50. If you are looking for information about a deceased person, you won't find it on Facebook. The deceased people also connect the living. If you and I are somehow related, it's probably because of a deceased person a while back.

WSJ: And what does the growth look like?

GJ: It took us seven years to reach the first billion profiles--the next billion will be in less than a year. There is a fascinating network effect, which is what attracted Bessemer to the business. You suddenly get a discovery that the website makes on your behalf and you're connected to a family in Europe that you didn't know you were related. Even if you lose interest and become inactive, a year from now someone might join MyHeritage and get matched to you. Now we've expanded into historical records. We can match tree data to free text information like newspapers, so we can find stories about your ancestors with very low false positives. That means people don't have to spend days and months doing research. They do nothing, we find the results and email to them, and it has a much higher conversion rate into paying subscribers. You have a higher probability of ever wanting a subscription.

WSJ: Why are people interested in this application?

GJ: It's a very emotional, universal basic need for people to understand where they came from and understand more about themselves. Sometimes people have other motivations, like finding wealthy relatives or famous celebrities. Families often have unique stories on how they survived the last few thousand years. People are strongly interested in discovering those stories, and the truth is often wilder than every fiction. It's a hobby, but one that is life-long, like a never-ending detective story.

We have other services too. When people feel like they're at a dead end and can't discover anything beyond their great grandparents, they can take a DNA test -- and we can connect sometimes more than 500 years back. Sometimes it even contradicts the documented family tree.

WSJ: It's a subscription service, right? How does the growth look?

GJ: The churn rate is probably the lowest in the industry. It's about 1.25% monthly. Ancestry, a public company, has a churn of about 3.5% monthly. People don't want to lose their family legacy. They can of course export everything out and leave the website, and all their family members are typically on it that people don't leave. A lot of people are taking long-term subscriptions like a five-year subscription.

In many other businesses they look for the shortest subscription possible. We are discouraging the purchase of long-term subscriptions because we want to ensure our cash flow is consistent, but a typical subscription is $75 a year for the premium, which is the lower tier, and $120 for premium plus, which is $10 a month. People who purchase five years in advance, they get a discount. We are more than doubling the subscribers every year, and for four years in a row our revenues have doubled every year.

Our last round was $15 million in 2008; it took us four years to burn through that money and a lot of that was used for acquisitions. In the last year we were almost break-even and we almost doubled our staff. We are as profitable as we want to be, but in the moment we favor continued strong growth.

WSJ: Is that what attracted Bessemer?

GJ: Investors love recurring subscriptions, they love the predictability of the business. If we can show the lifetime value of a customer we bring is more than 3x or sometimes 4x the customer acquisition cost, to them this is a money-making machine. Every $100 you spend comes back as $300-$400 every couple years. All the graphs on number of subscribers, revenues, profiles, matches, look the same, going up aggressively. This is what attracts them to the business.

WSJ: Why acquire Geni?

GJ: Geni was founded by a very talented individual. When David Sacks started Geni in 2007 people have been telling me, ok, Gilad, game over. If a person of this caliber is moving into the space, your chances are slim. We were inspired from each other, they were looking at much the same direction as we, and in the end David founded Yammer within Geni and spun it off. He was co-CEO of the two companies for two to three years. So I had to compete with only 50% of David Sacks, which gave me a small chance of success. Eventually he put himself 100% on Yammer and his departure from Geni eventually made them more vulnerable to us. We have had difficult negotiations for almost a year. To us, Geni is adding a huge user base--7 million users--also very global, very strong in the U.S. They have excellent technology, a unique vision about connecting everyone into a single family tree if you can implement it properly, and it just complements us. MyHeritage is a forest of private hyperlinked family trees, and Geni is building a family tree of the whole world. If you combine the two, you end up with a reference of the world, everyone is on there, just like everyone is on LinkedIn.

WSJ: That's quite a step up from 2008.

GJ: We had no revenues then, we were still free and not even freemium. We managed to use that round to establish a very successful subscription business, and what helped us was there was a small financial crisis in 2008. There was Sequoia's famous "RIP good times" presentation. That was a good wake up call for us to start thinking more seriously about the business, and we took that very seriously. Luckily, the good times were not RIP, they were back really quickly.