There have been rumors for some time now that Automattic, the company behind the WordPress blogging platform and open-source community, was looking to close a large round of funding that might value the company at $1 billion or more. On Monday, Automattic CEO and WordPress founder Matt Mullenweg confirmed that the company has done exactly that — raising a $160-million round led by Insight Venture Partners that values the company at close to $1.2 billion.
In an interview after the news broke, Mullenweg said that he raised the funding because there is still a large market opportunity for the company to pursue, even though almost 30 percent of the web is based on the company’s blogging platform — including Gigaom (please see the disclosure at the end of this post). Web publishing is still too hard, the Automattic CEO said, and there are still billions of new users coming to the web.
Focused on users, not advertisers
Mullenweg also said that platforms like Twitter and Facebook are encouraging more people to create and publish content, but that WordPress is different because it is not beholden to the interests of advertisers but instead is focused on the needs of its users:
“There’s 78 percent of web that doesn’t use WordPress, and there are also billions of people coming online. Facebook and Twitter are getting people more comfortable with going online, but those users deserve a platform that is more theirs rather than advertisers. Everyone cares about users of course — no one would say they don’t — but our revenue comes from users.”
Mullenweg, who started WordPress in 2003 when he was just 19, took over as CEO of Automattic in January of this year, and said just a year ago that the company was fully funded and didn’t need any new equity. The financing he was talking about at that time was a $50-million secondary round that involved Tiger Global, a private-equity investment fund, acquiring shares from existing shareholders.
The round that the company just announced on Monday is new money — the first such round since the WordPress parent raised $12 million in 2008 — and it was led by Insight Partners, and includes individual investors such as Twitter and Tumblr backer Chris Sacca, as well as a special vehicle created by True Ventures, one of Automattic’s original investors.
Big opportunity in mobile publishing
In his discussion of the funding in his blog post, Mullenweg said that there is still a large opportunity for WordPress to make even further inroads into the publishing market, especially the market for longer-form content — a market it moved even further into recently with the acquisition of Longreads. The Automattic CEO also talked in our interview about the need to make mobile publishing more appealing.
“We’re not happy with the current tools — ours or others. Only a small part of WordPress functionality is available on mobile devices, so there’s a huge oppportunity there. Everything we’ve built until now, which I am very proud of, is still only available to a small part of the market. I’m very very excited about this next chapter.”
WordPress isn’t the only blogging or digital-publishing platform to have raised money or set its sights on a larger market: Tumblr sold itself to Yahoo for over $1 billion last year, and competitor Squarespace also raised a large funding round recently, as did Weebly. As publishing becomes increasingly digital, the marketplace for easy-to-use and dependable content platforms is likely to look more and more appealing — both for investors and for acquirers.
Disclosure: Automattic is backed by True Ventures, a venture capital firm that is an investor in the parent company of Gigaom. Post and thumbnail images courtesy of Pinar Ozger