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Automattic raises $300M at $3B valuation from Salesforce Ventures (techcrunch.com)
234 points by jblz 28 days ago | hide | past | web | favorite | 120 comments



> “The roadmap is the same. I just think we might be able to do it in five years instead of ten,” Mullenweg said.

I tried to hunt for why the investment was taken and this is all the article mentions. It just doesn’t make sense to me. I’m guessing that competition is heating up and they need marketing fuel to keep people on the platform while they transform it from a duct taped blogging tool to something more flexible.

There is no middle ground with WP. You’re either buying a generic theme that doesn’t really fit your business and forcing your content into it... (every small business out there right now) or you’re Rolling Stone and you run big boy WP with major customizations. The middle area is weak. That’s where people like Wix etc... are eating their lunch.


Where it's possible, I'll always invest in product and engineering over marketing (specifically external ad spend). The Tumblr acquisition is a good example of that, we actually scaled back WP.com marketing in anticipation of that to give more room to bring on Tumblr's entire 200ish-person team. 90%+ of our growth is organic, and that percentage is going up.


Translation: We're actually doing well, but you only hear about Wix and others because they spend more money on advertising than we do.


I wish I could stop having Wix ads on youtube, I have seen it like 500 times already. While Squarespace is on all the information channel as sponsors.

I have yet to see a single ads on Wordpress.

Not necessarily a bad thing, but now whenever I think of doing a simple website my brains clicks on Wix or SqaureSpace instead of thinking about Wordpress.com


Youtube premium removes video ads. Plus you can skip the product placement ads if you want.


(only if you live in countries where youtube premium is offered)


I see a lot of WP ads lately so perhaps I’m just being targeted.


300m in pure ads incoming


Sensible and pragmatic.

How dare you be a valley CEO with such an attitude? ;) /s

Also, congrats on the raise! *Coughs in IPO...


Is he in the valley?


Automattic is fully remote, so it doesn't matter if he's in the Valley. They are not in the Valley.


Valley state of mind, though.


"I'll always invest in product and engineering over marketing"

This is an often overlooked strategy from small to to big businesses, but one that pays off long term. We're a 3 people SASS having the same philosophy, and it's starting to pays off (we're 100% organic :)). Nice to hear Wordpress has the same.


If you ever have offices in Atlanta, let me know, I'd love to apply. :)


We don't have offices. 100% distributed. You should apply: https://automattic.com/work-with-us/


hi Matt :))) congrats!!!


The "middle ground" you speak of has not been ignored, and in fact has seen an explosion in "visual builders" to compete with the like of Wix.

Example: We use Divi (the theme), which is what we call a theme "framework" (not like Genesis) that allows almost any design & layout. This differs from most themes that typically have 1 or a handful of layouts that you must not stray too far from. While Divi offers pre-baked layouts, you're free as a designer to create something custom and then use the Divi toolset to build. We used to build every WP theme by hand, but Divi allows us to focus on design, and not the intricacies of WP theme development which is not core to our business (client solutions)


Thing is, Divi isn't something that your typical Wix / Squarespace user is going to consider when they look at WordPress.


Absolutely. We serve the market above Wix/Squarespace. We build the site with Divi, then hand it over with tutoring on how to manage page content and create simple layouts (the latter was impossible with stock WP before Gutenberg). If you're DIY you're most likely going to WordPress.com/Wix/Squarespace etc. and aren't a good candidate for our firm.


What do you mean by the "middle ground"? The way you described it, there's more middle ground with WordPress than with all other CMS platforms combined.

There are a number of fantastic visual website builders for WordPress that allow you to generally build whatever you want without writing any code.

If you have custom data needs you can use plugins to visually generate and present complex custom data, without writing any code.

If those don't meet your needs, you can write code to generate even more complex custom data structures.

If writing code isn't your thing, there is an absolutely massive market of WordPress developers ranging from pennies on the dollar to expert teams that charge $100+ an hour.

There are hosting platforms ranging from $5/mo to $100/mo to enterprise level. (And free options, but I wouldn't recommend any of them.)

Small businesses can go on just about any freelance or job site and get your site customized or a completely custom site built for hundreds of dollars, thousands of dollars, tens of thousands of dollars, or hundreds of thousands of dollars. You get what you pay for, but saying the options aren't there I just don't understand?


I've been playing with WebFlow a lot lately after using WP for years. I'm not a designer but the sheer amount of control that I can have directly on WP is really incredible.

I know there are a million visual designer plugins/themes for WP - but I've tried them all and WebFlow makes them look like kid's toys.

There's some limitations with WebFlow, but I'm making it my 1a option going forward.


How does oxygen compares with webflow?


Competition in the enterprise market is also heating up.

Adobe Experience Manager can be mentioned as an inferior product tech stack wise, but strong marketing including targeting the C level with PowerPoint presentations let’s it win customers.

Feature wise Wordpress needs to do something at the analytics level. It does not make sense to host everything via Wordpress however everything data related is done via third party analytics. This is also Adobe’s selling proposition (marketing cloud) and they have a point here, however weak, since for example Adobe Target is some very basic “if then” rule system. But it might impresses C level noobs. ;)


Agreed, although I don’t think WordPress itself needs it. There’s plenty of room for everyone in the ecosystem, and there’s a lot of room to grow at the high end.

I work for a company (Human Made) which is pushing heavily on this, and our WordPress-based DXP shipped in-house analytics in our last major version. I can’t see consumers using this stuff, but in the space we’re operating, we need it.


Adobe must have the best salespeople ever, for what people pay for Experience Manager vs what it actually does.


Anecdata point: A while back I worked for an agency where the _client_ had signed a $600k/yr contract for Adobe CQ, which was completely unused for the ~2 years I knew about it... Expensive suits and haircuts, and "meetings" on golf courses and in expensive restaurants, and the client shows up with zero notice saying "here's our Adobe CQ license!" and then rejected all the estimates for migrating their site from Alfresco to CQ... (And I just looked, it's now 5 years later and the client is onto at least the third agency since the one I was at - and the site is on Sitecore... I wouldn't be _too_ surprised to find out they're still paying for that CQ license... Either because they got signed up for a 5 or 109 year "deal"m or because they get re-schmoozed by Adobe's sale team every year...)


Better to have a dollar today than a dollar tomorrow, especially with economic headwinds on the horizon. Assuming Salesforce has some foreign capital in this fund everyone is still desperate to invest in the dollar.


I went to “word camp” Boston a couple years ago, although I’m not a wordpress user. The keynote was on “Gutenberg” there new in place content editor. Wordpress is is keenly aware of the Wix/squarespace etc competition.

It’s the laser focus of a proprietary platform vs open source. Since wix and company are now adding market places and other functionality to there core it should be interesting.

I think they’re moving in the right direction, but it’s hard with all the legacy cruft. I’m in the process of learning WP modules (my goal is to move an open studios over as a plug in)


Automattic is no different than any other private venture-backed company despite its "multi-generational open-source freedom fighter" marketing jargon. They raised because they are running out of cash and cannot sustain the business for much longer without an additional investment.

Private venture-baked companies that have been around as long as Automattic and are profitable or have favorable financials are going public right now. Automattic doesn't have the numbers or potential to IPO so they must raise.


How much of that $300M was a secondary to founders and employees? We may never know.


You will know, because we announced it. :) It's 100% primary. There's been a lot of additional interest so probably more secondary in the future.


From the horse’s mouth, as they say. This is an impressive sum of new capital for growth activities.


What does this secondary and primary mean?


Primary: money from the financing that goes to the company.

Secondary: money from the financing that goes to employees, founders, or other existing shareholders.

Companies often use part of a financing to “take out” existing shareholders. Many larger financings are actually to a large extent a “secondary”.


Possible reaction to the recent Webflow Series A ($72M) maybe?


This is the middle ground that WP Engine is in and they are minting money.


Does anyone else see a misalignment between the $3B valuation and the huge impact Wordpress has had on the internet? 1/3 of all websites are powered by Wordpress, yet they seem to be valued low compared to other tech companies.


Linux powers most of the web servers on the internet. The Linux Foundation is not worth billions of dollars.

All of those servers run on Intel chips. Maybe some AMD. Even combined, companies like Google and Amazon, who would be nothing without those chips, are worth more than the companies that make their chips.

And electricity! Our electric companies aren't worth a penny compared to these huge tech companies. That's strange. They wouldn't even be able to see, let alone run their computers, without the electric company.


The Linux Foundation is not worth billions of dollars

IBM paid billions of dollars for Red Hat.


And most of the webservers on the Internet does not run Redhat.


Pretty sure the vast majority of those WordPress sites bring them no revenue.


Since when has valuation been based on revenue? :)


au contraire, i bet wordpress users make a lot more revenue than SV combined (not a high bar - most SV startups lose money)


Right, but they probably get close to zero from the self-hosted WordPress users. The revenue is from people paying WordPress.com to host their sites. That's the number of users that's relevant, and it's a much smaller number. The self-hosted users that are the majority don't count for much.


On the self-hosted side they probably make a reasonable amount on premium licensing for WooCommerce addons in the WooCommerce marketplace as well as JetPack & Akismet.


I mean wordpress in general, not just wordpress.com


I'm sure Apple alone has more revenue than all wordpress sites combined.

And you can have a lot of revenue while losing money.


Yes of course, i should have said “their competitors in sv”

Woocommerce users apparently make $10b in revenue, and i doubt they lose much, after all it s free


They don't make that revenue on behalf of the folks who make Wordpress, necessarily


All these sites get ads that should make a ton of revenues for WordPress.


The less value you capture as tech provider, the more value is captured by your customers and allows them to strive, so it makes a lot of sense to me.


My understanding is that Automattic owns WordPress.com and not WordPress.org.

i.e: You can be in Automattic business and make a dev team larger than them that develop the core WordPress. They don't rule WordPress the open source product but just are a company that made it.


Interesting that "whois wordpress.org" doesn't show who owns it.


It's the WordPress foundation. It's on Wikipedia.


Open source has massive benefits. WordPress would be nothing if it was closed off.

But open source also means users can fork if the company sucks.


Usage doesn't mean much if you don't have the users' data.


Their product is not their stock, it's their code.


a billion used to mean something, once upon a time.


“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."

God help us all.


Better than Medium. Kanye West of the online publishing platforms. 'Pardon the interruption, imma let you read this blog, but...'


Awesome! @photomatt would also love to know the company's plans with HappyTools (https://happy.tools/), what's coming next?


The article didn't mention the lack of version control, which AFAIK is impractical due to the sheer amount of HTML and layout-defining configuration WP stores in the db.

In spite of WP's revision history feature on Posts and other models, I've always found this to be a major issue on WP sites.

Obviously there are numerous other problems with WP, that's just one I didn't see the author touch on.

I try to talk clients out of WP whenever possible, and most let me build using a proper MVC framework.

I like to think I'm making the Internet a little better, one not-another-WordPress-site at a time.


DHH isn't too thrilled about this.

> “We want every website, whether it’s e-commerce or anything to be powered by WordPress” is a nasty, monopolistic goal. Listening to Matt muse about 85% marketshare dreams is a real downer. But $300m is a down payment on monopoly dreams.

full thread: https://twitter.com/dhh/status/1174695189090308096


DHH and Jason Fried like to preach a lot. WordPress/Automattic is an awfully weak target to pick on about a monopoly. I wonder what would happen if Basecamp had 85% market share in the project management tool sector? Would they say "sorry folks we're being too monopolistic. We're going to have to kick some of you off." I don't think so.


does he know WP is open source?


He does:

https://twitter.com/dhh/status/1174702952411303936

> "Yes. Monoculture in open source is scarcely better than monoculture in closed source. Monopolies of all stripes are bad for the web."


Monopoly and open source dont mix. I can't think of an open source project that became monopoly by itself, without the continuous backing and pushing of its parent company. And there were/are plenty of monocultures in open source (apache / mysql / nodejs / Linux) that was rather a good thing than bad.


Guess he must hate Acquia is well? Not sure why DHH always has to be such a... downer.


because he has witnessed dozens of companies overtake his own in achieving mega-valuations and success without following his cargo cult advice that was born from a halo effect

his entire m.o today is to beat down anything that doesn't fit the poor and loose thesis he built a brand on -- everything from "surveillance capitalism" to "open source monopoly bad"


As far as I know, DHH isn't a big fan of investments in general.


He hate the word Unicorn, and dislike Start-up with VCs and Hyper growth, along with the mentality you need to be in Silicon Valley and get hundreds million in funding, all while working 8-8 everyday to succeed.

In other words, he is very much Anti - Silicon Valley.


He still took money from Jeff Bezos.


I am surprised nobody here mentioned wooCommerce and Gutenberg. Prior to Gutenberg, I was sold on Elementor but now with the upgrade have been using Gutenberg quite often and love it.

I bet the funding is going into these two fronts especially wooCommerce (the top ecommerce platform on wordpress and also owned by Automattic.


Will things like WP (not in particular) die out eventually because of poor developer experience ? Corollary: frameworks liked by developers will eventually stick even if currently they have a modest userbase.


I genuinely thought Automattic is already profitable, is it not?


Automattic is profitable.

This funding round is less about securing long-term profitability and more about long-term partnerships and scaling their portfolio of products[1] deeper into other third-parties such as Salesforce (and beyond):

> “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.

[1] https://automattic.com/about


Without looking heavily into it, it seems like given Wix is trading $6B in public markets, why not try and IPO unless you believe there is a large business synergy with Salesforce?


To me, they seem to have to have a lot of employees (940, soon 1200) for what they do. That probably makes it harder.

I'm curious what portion of the employees are development folks.


43% are in engineering, according to LinkedIn.


I would love for that percentage to go up, and we are hiring! High velocity and high scale backend work, tons of React with Calypso and Gutenberg, the most leveraged systems group I've ever seen, a really lovely-to-work-in native apps team, and of course everything coming in with Tumblr.


Why are you still pushing Gutenberg though? The reviews continue to be negative: https://wordpress.org/plugins/gutenberg/#reviews


Have you tried using gutenberg? i love it.

granted, i'm not trying to make a business selling wordpress templates, or trying to use wordpress in some way other than just as a blog. but a lot of the gutenberg criticism seems to be of the "i hate this because it's new" variety.


So you officially love React again? :)


Whenever I see valuations like this from corporate VCs, I always wonder if they're trying to protect against someone else buying the company.


I hope that our fundraising history shows we wouldn't do a round that reduced our business optionality in the future!


I generally presume you're no fool Matt, hence it was just a wondering, no offense intended of course. :)


Around three years back, if you were to ask me to build a website, I would straight up choose WordPress. Not because it was the best at it, but because it was the easiest and the cheapest way to do it.

Now, I'm not so sure.

Blogging itself is in decline and the kind of blogging experience WordPress offers is, frankly, too bloated for the average blogger


> Blogging

WP is a full-featured CMS and has been for over a decade.


Hopefully this means Simplenote will continue to be supported!


I think Matt mentioned it on the Vergecast recently, so it's not a secret – we have a team of top folks working on Simplenote and are continuing to invest in it.

Source: I'm on the mobile team at Automattic and just spent a week hanging out with the people working on it :)


Simplenote is incredible. I really hope they don’t add too many features, as its glory is in its simplicity.


> We want all website to be ran on WordPress

The horror, it would be a worse disaster than npm. God no


The keyword in the post is "e-commerce"


“e-commerce” does not directly come to my mind when I hear WP. Different story with Salesforce.

So the question is - how does it fit together?


Salesforce bought Demandware, which was built on Intershop, and while a dominant force in ecommerce, it's also a stagnant one, sorely lacking on the content front. There have been several attempts to fix this, and none are keeping up with modern alternatives.

The admin for Demandware hasn't changed in years. Woo is nowhere near where SFCC is in terms of functionality, but with this kind of investment, the folks involved on the Automattic side are likely far more personally invested in building out an ecommerce platform around WP, certainly compared to anyone who's hired on to go spelunking in the Demandware codebase.

Look for a hosted, enterprisey take on WooCommerce in a couple of years.


Matt has been a special founder. He has integrity and a his compass is aligned with a strong vision for product and the open internet.

The battle for an open internet is multigenerational Here a quote from the article “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


As they get more and more funding, their content moderation is converging with Facebook. This is from May:

https://www.reddit.com/r/asktrp/comments/bn5gse/what_happene...


$160 million dollars is a ton of money. WTF.


Edit: sorry, misunderstood.


The second paragraph of the article says they hadn't raised tons previously, just $160 million.


"To that end, as we reviewed our hiring process, we realized that the demographics of people we attract to apply are not inline with the demographics of the people we hope to hire."

If that's there attitude then fuck them. You can guess which demographic they are talking about.


I googled the quote, and based on the context here [0], it seems like the demographic being referred to is non-male.

What's wrong with reviewing hiring processes to determine if they're excluding a demographic that contains individuals who would have done well in the role?

[0] https://cate.blog/2019/05/15/addressing-hiring-gaps-through-...

EDIT: The tl;dr for the article is that they're doing research on "how the people you didn’t hire would have done".


There's nothing wrong with reviewing your hiring processes to audit for equality. Outright saying that you attract a demographic that you DO NOT WANT TO HIRE FROM is a whole different level of problem. Might as well say no blacks and irish. That whole quote could be associated with various different ethnic groups over the years depending on the time it was written. in 2019, that type of quote should not exist.


> Outright saying that you attract a demographic that you DO NOT WANT TO HIRE FROM is a whole different level of problem.

That's not what was said. Nothing in that quote implies "we will hire zero men".


She literally said she gets applications from a demographic that she doesn't want to hire from.... am I missing something here? You can't just say I have too many Asians and therefore would prefer to have my applicants not be Asian.


If she literally says that, please quote it.


"we realized that the demographics of people we attract to apply are not inline with the demographics of the people we hope to hire."

I already quoted....


That quote does not support your statement "She literally said she gets applications from a demographic that she doesn't want to hire from...". She did not literally (or even figuratively) say anything of the sort.

"We'd like a more diverse pool of applicants" does not mean "we'd like a pool of applicants with zero of <over-represented demographic> in it".

It doesn't even mean they want less of that demographic at all. It can (and likely should) be read as wanting a larger applicant pool overall, adding in folks from demographics who simply aren't applying currently.


"We'd like a more diverse pool of applicants" does not mean "we'd like a pool of applicants with zero of <over-represented demographic> in it".

Are you sure about that? I don't think this is about equality at all. It's about her and her agenda. Forcing people into your pipeline to meet a soft quota is silly.


> Are you sure about that?

Yes.

If I look at my garden, and I say "gee, it's all yellow flowers... I'd like some red and purple ones, too", it's kinda nutty to think I'm saying "I'm going to rip out all the yellow flowers and burn them".


But you'll stop growing yellow ones so now when a yellow comes to your job interview you may turn that flower down purely based on race which is wrong. It's illegal to discriminate purely on someones race. If I would have otherwise hired you but I 'need' more red flowers then that's bad.


I'm assuming "the demographics of the people we hope to hire" means demographics that match the population at large. They should have been more clear about what that meant.

Nevertheless, if the demographic profile of their hires doesn't correspond to the demographics of the population they're embedded in, it's reasonable to question whether 1) they're unfairly excluding people and 2) the extent to which the people they're excluding could have contributed.


I'm not sure what % of the population or wordpress user population is trans. Do we need to match the population in the first place? What if trans people just don't want to work for Automattic?


> What if trans people just don't want to work for Automattic?

That's why they're doing the survey? To find out if that's true, and if so, why it's true?

> Do we need to match the population in the first place?

If trans folks have statistically similar job abilities to non-trans folks, a disparity in hiring may indicate some other discriminatory / disparate factors that can be fixed. They might even be entirely unintentional.

That's why you do the research.


> Do we need to match the population in the first place?

The extent to which things don't match is worth looking into. Historically such mismatches have more often been due to unequal opportunity than to other causes.


Read all the way to the end.


I did. It's a call for women and non-binary people to participate in a survey, not get a job. They're trying to assess the people that are under-represented in their hiring, not hire them preferentially.


Actually I can't guess, go ahead and tell me which demographic do you think that is?


This comment isn't in the article anymore..


It's on a blog by someone that makes hiring decisions. It's not in the linked article. You can google it.




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