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Automattic Beefs up its Platform

Posted on Monday, Jan 20th 2020

According to W3Techs, WordPress is used by 35% of all websites and it dominates the content management system market with a market share of 62.3%. Automattic, the company behind WordPress, last year raised $300 million from Salesforce Ventures at a valuation of $3 billion.

Automattic’s Offerings

Founded in 2005, San-Francisco-based Automattic’s offerings include the very popular blogging platform WordPress.com along with several other web publishing services such as the enterprise service WordPress.com VIP, backup and security service VaultPress, HD video service VideoPress, e-commerce plugin WooCommerce, and website management plugin Jetpack.

Automattic has nearly 1,000 employees across 68 countries and is a proponent of the remote working culture. Last year, it launched Happy Tools for companies with a remote or globally distributed workforce. The first among the tools to be launched is a calendar-based time management app Happy Schedule. It will cost $5 per user per month with a minimum price of $60 per month.

Its competitors include Joomla, Drupal, Squarespace, Wix, and Shopify.

Automattic’s Acquisitions

Over the course of nearly 15 years, Automattic has acquired 20 companies and built a strong portfolio for its platform. It offers long-form content platform Longreads, note-taking app Simplenote, a drag-and-drop file-sharing platform called CloudUp, a collaborative translation tool called GlotPress, and a survey-creating platform called Crowdsignal (formerly PollDaddy).

Last year in May 2019, Automattic acquired subscription payment company Prospress that had developed a recurring payment solution for WooCommerce. Prospress also has a marketing automation tool for abandoned carts, follow ups, and cross-selling. The Prospress is a strategic acquisition that will help Automattic own a bigger pie of the e-commerce stack. Terms of the deal were not disclosed. Founded in 2013, Prospress has an estimated annual revenue of $2 million and competes with Saucal.

In August 2019, Automattic acquired CRM plugin Zero BS CRM for an undisclosed sum. Zero BS CRM is a WordPress-based freemium plugin with more than 30 commercial extensions that provide deeper integrations with third-party services. Automattic plans to integrate it into Jetpack and will be known as Jetpack CRM. Founded in 2016, Zero BS CRM has an estimated revenue of $1 million and competes with WPREP.

In August 2019, Automattic also acquired micro-blogging and social networking platform Tumblr for an estimated $3 million. Founded in 2007, Tumblr was acquired by Yahoo! for $1.1 billion in 2013, but Yahoo! wrote down $712 million of its value in 2016. It was acquired by Verizon in 2017. As of August 12, 2019, Tumblr hosted over 475 million blogs. Automattic Founder-CEO Matt Mullenweg has said that Tumblr will operate as a complementary service to WordPress.com.

Automattic’s Financials

Automattic makes its money from subscriptions to tools on its platform, advertising on user sites, and by charging media companies to run their blogging platforms. It is estimated to be profitable and to have annual revenue of $120 million.

Automattic has been venture funded so far with $617.30 million from investors including Salesforce Ventures, Insight Venture Partners, Chris Sacca, True Ventures, Tiger Global Management, Iconiq Capital, Polaris Partners, Radar Partners, New York Times, Shelby Bonnie, Blacksmith Capital, CNET Networks, Doug Mackenzie, and Kevin Compton. Its most recent funding round was held in September last year when it raised $300 million from Salesforce Ventures at a valuation of $3 billion. An earlier round of funding held in May 2014 for $160 million valued it at $1.16 billion.

The new funding will help Automattic scale and grow its business across its ecosystem. Following the funding, Automattic has announced the appointment of Mark Davies as its new CFO.

Automattic is a great example of a capital efficient company that has scaled to dominate not just the world of publishing but also its ecosystem. We have been using WordPress since the very beginning and have always loved the product. It worked perfectly and could have done without the recent Blocks feature. Sometimes, when something is perfect, it is better to leave things as they are!

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