Blog Post Creator Raises $29.5M

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Matt Mullenweg, founder of Automattic and creator of open-source blogging system WordPress, stopped by my apartment earlier this week. Matt, who is one of my closest friends, brought his Texan sense of humor and all-around good cheer, both of which were much needed following my little medical episode.

While we were chatting, he let it slip that Automattic had raised a whopping $29.5 million in a Series B Round of funding, including a strategic investment from The New York Times Co. Previous investors True Ventures, Polaris Ventures, and Radar Ventures also invested in this round. (Full disclosure: both Automattic and GigaOM are backed by True Ventures.) [digg=]

Update: As part of this funding, some insiders including senior management whose options had vested were given an opportunity to cash out. The Wall Street Journal reports:

“Still, Automattic’s investors are taking pains to keep the company’s founders motivated: Some of the $29 million will be used to help company founders and others cash out some of their holdings in the private company, Mr. Black said. The practice has become more common in Silicon Valley as start-up founders spend longer building their companies without any payday.”

It is quite an event for the company, which began with Matt mucking around with code in his Houston bedroom. As one of the first adopters of WordPress, I got to know Matt well, yelling at him for not fixing bugs (which I still do) and always telling him what “features to add.” He took note of all it, and some of those features have actually shown up in the software. Eventually he moved out to San Francisco and started Automattic.

In recent months, Automattic’s premier offering, the free hosted blogging service, has started to grow by leaps and bounds. In addition to the 2.2 million blogs that it hosts (which generates, according to the latest trailing 30-day numbers from Quantcast, 42 million unique U.S. page views, 114 million global uniques and 482 million page views overall), is becoming an attractive option for media groups that don’t want to muck around with infrastructure. In addition to the GigaOM network of sites, CNN, Fortune and Fox are some of Automattic’s premier customers. Even more impressive (as far as I’m concerned) is that New York Yankees pitching star of the future, Phil Hughes, has a blog on as well.

So what does Automattic need the money for? After all, from what I know of the business, Automattic has been bubbling around the break-even point for a while now. Matt explains that they are going to roll out newer, hosted services such as BBPress (forums), and will expand their other product offerings, such as Gravatar and the spam-protection service Akismet. The money will be spent to hire more engineers and build out a more robust infrastructure.

That would be a start. Anne Zelenka made an impassioned case for using WordPress to build a social network, and I wouldn’t be surprised if we see some social features start to creep into as well. They just boosted their storage capacity to three gigabytes, which indicates that they are serious about allowing bloggers to add video and other multimedia content to their blogs.

207 Responses to “ Creator Raises $29.5M”

  1. Great post. Why shouldn’t WordPress develop a social network! After all that seems to be where all the up and coming networkers are gathering and putting down their roots as they stay connected and get informed. Not to mention, plan their financial and personal future with contacts around the world. $29 million should attest to the interest level in WordPress.

  2. “Some of the $29 million will be used to help company founders and others cash out …”

    Astonished that their isn’t more, well, astonishment that they raised money to give themselves. I guess it’s private money, but I wouldn’t want to be invested in something like that.

  3. I like WordPress as engine, but is too restrictive to use it as free service – in particular, that hard limitation for no-javascript makes it useless for me, so I moved to not even tried to move beyond first automatically created posting.

  4. Maybe they can spend some of that money towards customer service classes, learning how to deal with complaints about employees making racist and bigoted remarks towards their volunteers and fixing the bugs that have been ongoing at for months now.

    +1 for the adult supervision. Won’t happen though.

  5. Well looks like with this huge amount of money and 2 million blogs, Automattic is well positioned to get into the online advertising business, if only for their network of blogs.One thing im not too sure about is the NYT becoming an investor in Automattic/Wordpress.
    NYT being one of the best media organisations and on the other hand an open-source project we all like!

    So, what does WordPress do with all that bucks?

    Parul Bindra – Web 2.0 Blog

  6. Alexander Ainslie


    A rapid and reasonable way for WordPress to build in vertical and lateral social components on to the WP platform may be to buy into Marc’s Broadband Mechanics. Such a play could also serve as a “spread bet” in the whole “OPEN” aggregation space. WP would also get the benefit of the smart and vocal (this is an understatement!) Marc Canter in the process.


  7. Om,

    I am also very glad to see you blogging again, and I’m thrilled that WordPress has raised this capital. Hats off to Matt and everyone on the WP staff. Om, please take care of yourself and don’t push it too soon, as Francine mentioned above. We’ll all be here whenever you return. That’s what friends are for.:-)


  8. “Still, Automattic’s investors are taking pains to keep the company’s founders motivated: Some of the $29 million will be used to help company founders and others cash out some of their holdings in the private company”

    That’s a bit of a contradiction in terms isn’t it – buy their ownership out to keep them motivated?

  9. The best part of this development is that there will undoubtedly be some adult supervision coming in. Matt has had a tendency to arbitrarily shut down blogs that get under his skin for one reason or another.

  10. Om… Good to see you dabbling with work again. Hope you recover soon.

    And congrats to Matt. WordPress is without any doubt a great product which i have been using for varied set of my multiple websites/portals.

    I was looking at BBPress and will be using for one of my portals. Your post above says some of this funding would go into improving BBPress, which is a great sign of encouragement.

    Good luck

  11. Where’s the money gonna go? Dunno. But I bet WPMU is gonna get attention … including all that “WP as CMS” stuff. That’s non-trivial, and a 20% effort would have hellacious blow-back.

    For the moment: a big shout to Matt and all hands!


  12. Om, your response to Francine is reassuring. Glad to know that your dabbling according to what your doctor says and how you feel ;)

    Let me know if you need anything.

    I’m a big fan of Matt’s…best of luck to him!

  13. Francine

    thanks for your kind words. I am dabbling in work right now, depending on how I feel on a given day, and what the doctor says. This stop-start blogging is going to be the trend for another month or so before I regain my strength.