WordPress.com owner Automattic raises $300 million
Automattic CEO and WordPress co-founder Matt Mullenweg in 2014. Photo by Auby Stephen McCarthy / SPORTSFILE via Getty Images
Automattic Inc., the parent company of web publishing platform WordPress.com, announced on Thursday that it raised a $300 million as a part of a Series D round from Salesforce Ventures. The investment puts Automattic’s valuation at $3 billion post-funding.
Why it matters: "A website for everyone" is the cry of a bygone tech era, but businesses and many individuals still want to set up their own websites, and WordPress remains the dominant tool in the field.
Details: The raise brings Automattic's total amount raised to $491 million in funding over four rounds. Salesforce Ventures joins Insight, Tiger Global, and True Ventures as an investor in the company.
- For Automattic, the funding will help the company grow its WordPress business, says Automattic CEO and WordPress co-founder Matt Mullenweg.
- For Salesforce, the funding deepens the company's commitment to WordPress and the open web, says President and Chief Product Officer Bret Taylor.
Be smart: WordPress is an open-source software platform that's owned by a non-profit group called The WordPress Foundation. The foundation works to ensure that WordPress remains a free, open-sourced platform that's accessible for anyone to contribute to, mostly by improving its code.
- The popular consumer-facing domain WordPress.com is owned by privately held Automattic. Mullenweg was a co-founder of WordPress. According to Mullenweg, WordPress powers more than 34% of all sites on the web.
Between the lines: Automattic makes most of its money by selling subscriptions to software services that are related to the WordPress platform, like WooCommerce, an open-source e-commerce plugin for WordPress; Jetpack, a customization and security plugin for WordPress; and enterprise WordPress for businesses.
- It also makes money by selling advertising against some of the free blogs that users create on WordPress.com.
The big picture: In August, Automattic purchased Tumblr from Verizon for less than $3 million, a fraction of what it was worth when Yahoo bought it for $1.1 billion in 2013 (Verizon later acquired Yahoo).
- Mullenweg alluded to the fact that he doesn't plan to make any major changes to Tumblr and that he sees it as complementary to his biggest money-maker, WordPress.com.
- Our thought bubble: WordPress.com and Tumblr, although very different products, have both centered on creative empowerment — giving people free tools to build a platform and audience on the web.
The bottom line: The raise doesn't seem to be related to Automattic's recent acquisition of Tumblr.
Editor‘s note: This story has been updated to reflect the correct amount of total funds raised over four rounds and to clarify that Yahoo, not Verizon, purchased Tumblr for $1.1 billion.