Automattic, the company behind WordPress.com, WooCommerce and soon Tumblr, has closed a $300 million funding round at a $3 billion post-money valuation. The Series D round has a single investor, Salesforce Ventures.
Founding rounds are something special for Automattic. While the company has been around for 15 years, it hasn’t raised a ton of money. It closed a $160 million Series C round back in 2014 and raised little money before that.
Automattic and the WordPress open source project have a shared history. Many people are already familiar with WordPress, the most popular content management system on the planet. The company contributes to the open source project and also runs some of the most popular services on top of that project, such as WordPress.com and the Jetpack plugin, WordPress.com VIP (which TechCrunch uses) and WooCommerce.
This freemium business model with an open source philosophy at its core has been working well for the company. In 2014, Automattic had between 200 and 300 employees. The company will have close to 1,200 employees when the Tumblr acquisition closes.
Back in 2014, 22% of the world’s top 10 million websites used WordPress. There are now 34% of the world’s top 10 million websites running on WordPress.
“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,” Automattic founder and CEO Matt Mullenweg told me.
While WordPress started as an open source blogging platform, it has evolved into a highly customizable content management system. You can use it to show a portfolio, build a restaurant website, run an e-commerce company or even distribute news articles to millions of people.
“What we want to do is to become the operating system for the open web. We want every website, whether it’s e-commerce or anything to be powered by WordPress. And by doing so, we’ll make sure that the web can go back to being more open, more integrated and more user-centric than it would be if proprietary platforms become dominant,” Mullenweg told me.
And with the rise of social networks and closed platforms, such as Facebook, YouTube or Medium, Automattic is at odds with many of the dominant trends. Mullenweg still believes that the open source model creates some great network effects.
Instead of optimizing Automattic’s services for engagement and time spent, the company wants to empower content creators with great tools. Mullenweg mentioned Ben Thompson’s Stratechery as a great example of a content creator in control of his own destiny.
“The problem we’re tying to solve is likely multigenerational. It can take the rest of our lives and we need to pass it on to the generation that comes after to continue to work on it. Hopefully for the rest of humanity because I can’t imagine a time when humanity cannot benefit from an open, free, connected web,” Mullenweg told me.
When it comes to today’s funding round, Salesforce Ventures isn’t your traditional investor — and Mullenweg is well aware of that. There could be some partnerships and integrations between Salesforce and Automattic in the future.
“We’ve been a long time customer of Salesforce, we’re big fan of the platform. And definitely, you could imagine, given a lot of thoughts, how WordPress could complement their products,” he said.
Automattic doesn’t want to change course. With the new influx of cash, there won’t be any big departure from the current lineup of products and services. Automattic insists on its slow-paced and sustainable approach when it comes to launching and iterating on products.
“The roadmap is the same. I just think we might be able to do it in five years instead of ten,” Mullenweg said.
We’ll share a full interview with Matt Mullenweg in a few minutes.
