I’ll start with the big stuff: Automattic is raising $160M, all primary, and it’s the first investment into the company since 2008. This is obviously a lot of money, especially considering everything we’ve done so far has been built on only about $12M of outside capital over the past 8 years. It was also only a year ago I said “Automattic is healthy, generating cash, and already growing as fast as it can so there’s no need for the company to raise money directly — we’re not capital constrained.”
I was wrong, but I didn’t realize it until I took on the CEO role in January. Things were and are going well, but there was an opportunity cost to how we were managing the company toward break-even, and we realized we could invest more into WordPress and our products to grow faster. Also our cash position wasn’t going to be terribly strong especially after a number of infrastructure and product investments this and last year. So part of my 100-day plan as CEO was to figure out what new funding could look like and we found a great set of partners who believe in our vision for how the web should be and how we can scale into the opportunity ahead of us, though it ended up taking 110 days until the first close. (Our other main areas of focus have been improving mobile, a new version of WP.com, and Jetpack.)
This Series C round was led by Deven Parekh of Insight Venture Partners, and included new investors Chris Sacca, Endurance, and a special vehicle True Ventures created to step up their investment, alongside our existing secondary investors from last year, Tiger and Iconiq. (There is a second close soon so this list might change a bit.) There was interest significantly above what we raised, but we focused in on finding the best partners and scaled it back to be the right amount of capital at the right valuation. Deven and Insight share our long term vision and are focused on building an enduring business, one that will thrive for decades to come.
WordPress is in a market as competitive as it has ever been, especially on the proprietary and closed side. I believe WordPress will win, first and foremost, because of its community — the hundreds of core developers and large commercial companies, the tens of thousands of plugin and theme developers, and the millions of people who build beautiful things with WordPress every day. Automattic is here to support that community and invest the full strength of our resources to making WordPress a better product every day, bringing us closer to our shared mission of democratizing publishing. But a majority of the web isn’t on an open platform yet, and we have a lot of work ahead of us. Back to it!
You can read more about the news by Kara and Liz on Recode: WordPress.com Parent Automattic Has Raised $160 Million, Now Valued at $1.16 Billion Post-Money, on Techmeme, and on the Wall Street Journal.