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September 19, 2019

WordPress creator Automattic raises $300m as it bids to ‘power the internet’

By Luke Christou

Automattic, the creator of internet publishing platform WordPress, has raised $300m in a Series D funding round.

The venture division of software company Salesforce was the sole investor. It joins investment firms Insight, Tiger Global and True Ventures as investors in the market-leading company.

This follows a 2014 funding round that saw Automattic raise $160m and takes total funding to $617m according to Crunchbase. The latest investment gives Automattic a valuation of approximately $3bn.

Despite handing over control of the open source WordPress platform to the WordPress Foundation in 2010, Automattic remains closely tied to the platform. It continues to operate its hosting business through WordPress.com, and also owns various add-on plugins and services, such as ecommerce platform WooCommerce and analytics tools Jetpack.

The web’s answer to Android

According to Matt Mullenweg, co-founder of WordPress and CEO of Automattic, the additional funding will allow the company to continue its positive growth and continue investing in the WordPress ecosystem.

Mullenweg told TechCrunch that it hopes to become to the web what Android – Google’s open source mobile operating system – is to the smartphone market:

“I think there’s potential to get to a similar market share as Android, which I believe now has 85% of all handsets. When you think about it, open source has a virtuous cycle of adoption, people building on the platform and more adoption.”

According to Statista, Android OS currently powers 86.6% of smartphones globally, and that percentage continues to grow each year. According to Automattic, WordPress currently powers 34% of all sites on the web.

“What we want to do is to become the opening system for the open web,” Mullenweg told TechCrunch. “We want every website, whether it’s e-commerce or anything to be powered by WordPress.”

A “vote of confident” for Automattic

The WordPress platform is open source, meaning it is free to use, distribute, study or change. Automattic doesn’t profit off of the use of the platform. The company’s revenues instead come through both hosting and advertising on WordPress.com, which allows users to set up and manage WordPress sites with ease.

According to Mullenweg, Salesforce’s investment in the company is a “tremendous vote of confidence” in Automattic’s business model and the future of the open web.

Bret Taylor, Salesforce’s chief product officer, said that the company looked forward to “deepening our commitment to WordPress and the open web”.

However, there is additional value for Salesforce, which is a leading force in the customer management market. By investing in Automattic, there is potential for Salesforce to get many of its software and services built directly in to the WordPress platform, which would put its products in front of 34% of website owners.

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