How ZoomInfo’s CEO sold three companies for $431M over 24 years

In 1993, Yonatan Stern founded Corex Technologies Corp., a Cambridge startup focused on collecting and organizing business contact information. He funded it with about $4 million, if he recalls correctly, from local investment firms Ascent Venture Partners, Commonwealth Capital Ventures, and Flagship Ventures (now called Flagship Pioneering).

From that company, which changed its name to CardScan Inc. in 2005, Stern would eventually spin out two more, keeping his investors each time. As of last week, those three companies have all been acquired for a total of $431 million, capping 63-year-old Stern’s winding, and very lucrative, path through Massachusetts tech.

“We mastered the art of how you grow companies with very little money,” Stern said of his team, which has often followed him from venture to venture. “We focused all the time on delivering value to customers. We didn’t try to grow as fast as possible — we tried to get happy customers.”

In the most recent windfall, last week, Boston-based private equity firm Great Hill Partners paid $240 million for Waltham-based Zoom Information Inc., better known as ZoomInfo, according to Stern. The deal was first announced on Monday, but with no financial terms disclosed at the time.

ZoomInfo, another business-to-business contact data company, spun out of Corex in 2000 and raised just one round of venture capital, a $7 million investment in 2004 from Venrock Associates, which Stern says he never touched because ZoomInfo was growing profitably all along.

Despite its relative age and limited fundraising, ZoomInfo landed at No. 2,200 on the 2017 Inc. 5000 list of the fastest-growing private companies in the U.S. The firm reported a revenue of $39.8 million in 2016, with 166 percent growth over the past three years.

In 2008, Stern and other members of ZoomInfo’s executive team spun out Bizo Inc. The business-to-business marketing technology company moved out to San Francisco, raised $28.5 million in debt from investors including Ascent and Commonwealth Capital, and then sold to LinkedIn for $175 million in 2014.

CardScan itself sold to Newell Rubbermaid Inc. for $16 million in 2006.

Chris Lynch, one of CardScan’s earliest investors with Ascent, wrote in an email to the Business Journal of the reasons for Stern’s success.

“Yonatan is uniquely but quietly motivated to solve big problems through technology,” he said. “In a world where creating a successful company is very difficult, and creating two is extremely rare, Yonathan has been responsible for the genesis of three successful companies.”

Stern, who moved back to his home country of Israel in 2004, has agreed to stay on as CEO of ZoomInfo for at least a year. After that he may start transferring responsibility to his executive team, but plans to stay on the company’s board and still owns a stake in the company.

Stern said he doesn’t expect the acquisition to change much for ZoomInfo’s customers or its 200 employees, the vast majority of whom work in Waltham.

As for his next endeavor, Stern doesn’t think he’ll start any more companies. But he does think he has more contributions to make to the field of computer science, particularly in the crucial area of natural language processing.

“I made enough money here that I can write my own research grants,” said Stern, who wrote many of the original algorithms that power ZoomInfo and also hold the title of chief scientist there. “That’s something that not every professor can say.”