
Square to buy Weebly for $365M - rezashirazian
https://www.cnbc.com/2018/04/26/square-to-buy-weebly-for-365-million.html
======
SwellJoe
Congratulations to David, Chris, and Dan! I've always thought Weebly was one
of the best startups in our batch, and the top one I would have wanted to
invest in had I been in a position to do so (and I've said so a bunch of times
over the years, even very early on).

This is, I think, a smart move for Square. Stripe has been moving up the stack
aggressively (and much faster than Square, who were very effective in the
beginning, but kinda stopped innovating), making it easier and easier for
people without a dedicated software team to build out an online sales channel.
Weebly has a lot of that stack already built. You can build a website and sell
things in a very short time with Weebly already. I imagine Square will be
making the "sell things" part of it even more core to the experience.

And, businesses do not change payment processing often. If you lock them in
when they're brand new and tiny and using something like Weebly, while also
providing paths for growth, you'll probably keep them basically forever. We've
rebuilt our website and ecommerce basically from the ground up four times
since we launched the company a dozen years ago and have only changed payment
providers once (maybe twice, I can't remember if we launched with
Authorize.net and moved to PayPal soon after or if we switched before
launch...partly based on ease of deployment and management). That's a lot of
money made on that initial customer acquisition. To get businesses earlier
than that, you need to have a really clear path from "I don't have a website
at all" to "I have a website and can sell things with it."

Enjoy your private islands, or the next project, or whatever y'all decide to
do next.

~~~
StudentStuff
Thing is, when you start processing normal sums of money (>$200k/month), both
Square and Stripe start to bleed you in fees. If your sub-$5k a month in
volume both make sense to use as a processor, but as you get up there in
volume, changing to any of their (much larger) competitors can easily halve
that cost and save you a few grand a month in fees.

~~~
SwellJoe
Most businesses starting on Weebly (or similar) will never grow over
$200k/month. Most small business isn't like the tech industry...it doesn't
scale exponentially once market fit is found. It scales based on number of
widgets and number of employees and how many physical locations or whatever
the business has, most small business growth is governed by the laws of
physics.

~~~
ccccccccccccc
Also, once a company reaches $200k/month they're likely to move to a more
powerful ecommerce platform like Shopify.

~~~
letientai299
Why is Spotify a better choice for that scale, snf not from the beginning, but
only after that?

~~~
fouc
Weebly is likely to be simpler or more user-friendly for people just starting
out. They might not know what level they will grow to yet, hence starting out
with something more basic initially.

------
dlevine
I assume this was a strategic move - Square seems to be buying businesses in
adjacent markets that are more profitable than credit card processing and that
are complementary to their offering.

I'm guessing that small local businesses tend to use website creators, and
it's mostly profit (once you have a good tool).

Does anyone have any more insight?

~~~
rmason
According to Crunchbase Weebly has 50 million users and I'm guessing they're
mostly small businesses which would all be perfect prospects for Square. Not a
bad outcome for them as they sold for roughly 10X what they've raised.

Competitors Wix and Squarespace have raised much more money and would probably
have been too rich for Square to buy. Wix is now a public company too.

~~~
avip
> According to Crunchbase Weebly has 50 million users

I don't see that number, but Weebly cannot have 50M customers. That's a 1.5
order-of-magnutude error.

~~~
rmason
"Weebly was started in 2007 and currently powers more than 50 million
entrepreneurs around the world"

[https://www.crunchbase.com/organization/weebly#section-
overv...](https://www.crunchbase.com/organization/weebly#section-overview)

~~~
bearcobra
The TechCrunch article about the deal says they have 625,000 paid subscribers
[https://techcrunch.com/2018/04/26/square-acquires-
weebly/](https://techcrunch.com/2018/04/26/square-acquires-weebly/)

------
AndrewBissell
My wife and I launched a small winery a couple of years ago and Weebly has
been essential for our online sales. They were the only affordable e-commerce
solution offering zipcode- and state-based shipping charges and sales tax. We
actually tried starting out with Square's Online Store because we were already
using their PoS stuff, but it was just a bit too raw to suit our needs.

Great move for Square IMO. Congrats to the Weebly team.

~~~
benmowa
looks like the sales tax is powered by Avalara

------
zapita
I'm surprised that the price isn't higher. It was my understanding that Weebly
is highly profitable, which would normally give them lots of leverage in any
negotiation. What am I missing? Maybe there is a ridiculous amount of Square
stock for the team on top of the price paid to shareholders? Or growth is
flattening dramatically and they panicked?

~~~
pbreit
It does seem low. I think all the stock compensation was included in the
published amount. According to reports, Weebly raised a Series C in 2014 at
$455m/$490m valuation. Competitor Wix which is public is currently valued at
$3.9b on I would guess about 5x the revenues.

~~~
pbreit
Note: Roelof Botha on BOD of both companies.

------
ArlenBales
As much as I don't want it (I'm a web developer after all), I'm surprised
Facebook hasn't tried to compete deeper in this space yet. They already have a
firm grasp on many businesses. So many local businesses in my city only have a
Facebook page and don't have a website, or if they do it's extremely outdated
(hasn't been updated in years and lacks search engine ranking). Facebook is
the website for many local businesses.

All Facebook needs to do is add a few more features:

\- Online menus (most restaurants are just uploading a photo of their menus)

\- Online reservations, and online ordering (for delivery/pick-up)

\- Ecommerce store (payments, delivery, etc.) and management (inventory) for
retail shops (boutiques, etc.)

~~~
jvagner
Having just spent some time reviewing the market of what you just wrote on
behalf of a consulting client, I can tell you that this market is ripe...

------
ggg9990
A bit of a disappointing exit for what was considered an IPO candidate. I
think they only knew how to make a great product and were clotheslined by
Squarespace and Wix’s giant ad campaigns feeding a super optimized funnel
management system.

------
jpdb
At first I thought it was Squarespace since they are in a similar market, but
it seems to be the financial company Square. I wonder what their intentions
are?

~~~
adpirz
Verticals for small business. Now they're a one-stop-shop for payments _and_ a
website.

~~~
seem_2211
This seems like a good way for them to differentiate against Stripe.

~~~
snuxoll
Square and Stripe fit very different markets, there's some overlap in both
could be used to power eCommerce sites but Square mostly targets traditional
merchants selling products and services, Stripe targets developers looking to
add payments to their product (SaaS, online marketplaces, etc.)

Either way, this is a perfect fit for Square - they already offer simple "one-
page" web stores for merchants, tying in a full-featured website or store
instead makes a lot of sense.

------
1123581321
I hope Square can accelerate Weebly’s growth. It’s disappointing that Wix has
beaten them so badly in the starter website market because, in my experience
and having used both backends, Weebly’s sites are way better for the same
amount of user effort.

------
AndrewWarner
After reading about Weebly's growth on Hacker News, a few years ago I
interviewed the founder about how they did it:

[https://mixergy.com/interviews/david-rusenko-weebly-
intervie...](https://mixergy.com/interviews/david-rusenko-weebly-interview/)

~~~
AndrewWarner
I think the first time I really noticed a Weebly blog was on the bottom of
Jessica Livingston's site:
[http://www.foundersatwork.com/](http://www.foundersatwork.com/)

------
z3t4
How come these card companies can have such huge margins !? It's effectively a
3% tax _on everything_ going directly to a small set of private businesses.
The government should issue a government sponsored payment alternative with
free transactions, which would also solve the problem with micro-transactions.

~~~
elvirs
thats what Dodd Frank bill did. 0.5% on Debit cards

~~~
diogenescynic
That’s another why reason republicans and the banking cabal want to over-turn
Dodd-Frank.

------
vit05
They where evaluated 4 years ago at $455 Million. Raised $35 million on this
evaluation.

[https://outline.com/EzRTkg](https://outline.com/EzRTkg)

------
MH15
This is nice to hear. Weebly was how I built my first website, inspiring me to
learn how to code. I first used Weebly to make a website for my "lawn mowing
business" almost 10 years ago. I remember trying to edit CSS rules in terrible
ways and enjoying it anyway on an old Dell laptop with 512 mb of RAM.

------
vm
Great exit for a team that hadn't raised much $ + great acquisition for Square
given the easy upsell path to all its SMB customers.

For perspective, competitor Wix is a $4B market cap company at a ~$500M
revenue run-rate. Shopify, which is quite different, has a $12B market cap at
~$1B run-rate. This is a massive market.

~~~
toephu2
Great exit for the founders, horrible exit for the employees.

In 2014 Weebly was worth $455m [1]. 4 years later in 2018 it is worth $365m.
Imagine how much more an employee could have made working for 4 years at a
public BigCo with RSUs you can sell every year. This is just another startup
lottery failure. Employees got screwed.

[1] [https://blogs.wsj.com/digits/2014/04/22/weebly-valued-
at-455...](https://blogs.wsj.com/digits/2014/04/22/weebly-valued-
at-455-million-amid-website-building-boom/)

~~~
scurvy
Saying employees got screwed without knowing deal details is a bit
preposterous. Weebly pays engineers pretty well compared with bigco salary,
has a cash yearly bonus, sabbatical program, etc. The only difference is stock
comp.

What bigco are you going to work for in SF that gives those rsu grants?
Salesforce, LinkedIn, and...? I wouldn't be willing to waste my life riding up
and down the peninsula for that rsu grant.

~~~
toephu2
and Dropbox, and Google (they have an SF office), and FB (opening SF office).
Yes that's why you would just move to SF then. If you are in the Peninsula
already then go work for FB, Google, LinkedIn, et al.*

*If maximizing for total comp

~~~
scurvy
My question was for people already living in SF who don't want to ride down
the peninsula. The choices are limited for bigco rsu grants.

Google doesn't have engineers working full time in the SF office. They highly
discourage it. The SF based engineers have a stigma that they're lesser than
the MTV counterparts.

FB doesn't have an SF office. Dropbox wasn't liquid until this year. To say
people wasted time or got screwed 4 years ago by not going to work for bigco
isn't fair.

------
mustythemustang
Not long ago Weebly was neck and neck competing with Wix & Squarespace and had
a superior product in some areas (ex. eCommerce). Unfortunately, the product
became stale and lacked vision over the last 3 years. As a result deserting
many of their users.

This was a "take what you can get" deal for the founders. Hope Square can
recharge the product with an innovative vision.

------
tlrobinson
Congrats drusenko and team!

------
0xCMP
I checked out their site and their example sites look really nice. Seems like
Weebly.com is running on their platform too (good sign).

------
fapjacks
Ah, well... Consider this a winning lottery ticket that I didn't pull the
trigger on. Could have joined pretty early.

------
dandellion
It's really annoying when a page ignores my language settings and displays the
language they want based on location. It's double annoying when there's no way
to give feedback without registering.

------
bogomipz
I thought it was interesting that the article mentioned Weebly competes with
Medium. Wouldn't they be competing more so with someone like Squarespace than
a blogging platform? Or am I missing something?

------
blairanderson
How many square employees freaked out when they went public at $12/share and
sold off.

Wonder what most people do in that situation...

------
DanCarvajal
Square looking to take on SquareSpace.

~~~
jonny_eh
More likely Square is taking on Shopify.

------
cm2012
I adore Weebly. This seems like a bargain!

------
foobaw
How will this affect Shopify stocks?

------
Romanulus
For a moment there I had vision of a sweet Figaro Castle themed website
template.

------
amrrs
I'm not sure if anyone uses weebly these days. Back in my college, when I was
running a solo business, weebly hosted my website and I proudly printed the
site url on my business card. It was the same time when Wix had flash based
design. And when Flash vanished one would expect similar fate for Wix. But
instead Weebly vanished which is a shame. Squarespace is something that Weebly
could have built. But it's ironic now to see Weebly joining Square which is
another bunch of missed opportunities. The touted Jobs 2.0 Jack Dorsey never
seemed to have turned around it.

~~~
SwellJoe
I'm not sure you're talking about the same company as everyone else. Weebly,
AFAIK, always had consistent growth; there was no time in the past where you
could say they were doing better than today, I don't think.

~~~
toephu2
I'm pretty sure valuation-wise they were doing better in 2014 than today...
[https://blogs.wsj.com/digits/2014/04/22/weebly-valued-
at-455...](https://blogs.wsj.com/digits/2014/04/22/weebly-valued-
at-455-million-amid-website-building-boom/)

~~~
SwellJoe
Is valuation what really matters? I mean, I understand from an investment
perspective and from the perspective of people who were hired at that time
that valuation matters. But, from a business health perspective, doesn't
number of users and revenue matter (a lot) more? Aren't they up from 2014 on
those metrics?

------
minimaxir
About 10x, as they raised $35M in 2014:
[https://www.crunchbase.com/organization/weebly](https://www.crunchbase.com/organization/weebly)

~~~
khuknows
I imagine the investors are after 10x the valuation, not the amount raised.

~~~
minimaxir
...and apparently it was raised at a $455M valuation. Hmm.

[https://techcrunch.com/2014/04/22/weebly-
series-c/](https://techcrunch.com/2014/04/22/weebly-series-c/)

~~~
dhruvarora013
Yeah I can't tell if the employees would be disappointed or thrilled? But I
guess an exit is an exit.

~~~
tejasmanohar
Likely depends on when you joined. The Series C investors had to get ~10% of
the company for $35MM to get their money back so I doubt they did so well, but
I bet it's a win for early investors, employees, and of course, the founders.

~~~
avree
I mean, any exit could be spun as a 'win' for the founders. Still surprising
that a company that was by all reports highly profitable decided to sell for
what is basically a down round.

