Automattic EC-1 Part 3: Acquisitions and future technique
Despite Automattic’s revered place, consciousness of its myriad companies tends to be spotty.
“I spend a lot of time with investors, press and research analysts, and I’m always stunned that people say, ‘We know WordPress.’ But they don’t know Woo,” says Mark Davies, Automattic’s chief monetary officer, referring to the firm’s WooCommerce subsidiary. “It’s always interesting when we say we’re doing $30 billion of payments volume through Woo and Automattic.”
Why ought to they care? For starters, WooCommerce is utilized by more sites than Shopify — which those self same traders, press and analysts positively find out about.
It’s additionally the lifeline that Automattic wants this decade to rebuild the web in an open route. Sixteen years after its founding, the firm has seen its valuation develop quickly from $3 billion with a spherical led by Salesforce in 2019 to $7.5 billion with a share buyback a few months ago. That development has been predicated on increasing past its conventional remit of publishing into the vastly profitable terrain of e-commerce, in addition to through its acquisition of Tumblr.
The technique right here is easy: Continue opening up bigger swaths of the web to open-source innovation exterior of the walled-garden platforms developed by Amazon and Facebook. If Automattic’s technique works out, Woo, Tumblr and WordPress will hyperlink to new providers that no person but associates with Automattic.
It’s an audacious imaginative and prescient, however the firm is setting itself up for a battle in opposition to some of the most formidable — and deeply pocketed — corporations in the tech world.
From customized themes to billions in funds quantity
WooCommerce started life as WooThemes, a small design agency that didn’t look very completely different from the many others that created WordPress themes. In 2011, the firm expanded to construct themes for on-line shops.
“They’d spotted an opportunity where a lot of the themes they were selling were more commerce oriented, so they hired some guys they were incubating for a commerce platform, brought them into the team, and that quickly overtook the company for the lion’s share of attention,” says Paul Maiorana, the present CEO of WooCommerce, a subsidiary of Automattic.
Despite WooCommerce’s recognition (its plugin was amongst the prime 10 hottest for WordPress), its success was largely contained inside the broader WordPress ecosystem. When Automattic acquired WooCommerce in 2015, the transfer went largely unnoticed in the broader tech group.
WooCommerce nonetheless had lower than 100 staff, and it didn’t seem like a big purchase. E-commerce, whereas clearly rising, had but to achieve stratospheric highs.
Internally at Automattic, there have been uncertainties over whether or not WooCommerce was value the buy, the worth of which was by no means disclosed however was described to W3Techy at the time as “the biggest acquisition by Automattic to date.”
“Even at the board level, we honestly asked if we should even be doing this. Everyone is saying this is a bad idea and you can’t compete with Amazon,” recollects Matt Mullenweg, Automattic’s founder and CEO. The counter view was that it was necessary for Automattic to cowl all its bases. “Our ambitions are incredibly broad, and we take a very long-term view.”
Before lengthy, WooCommerce was exploding in dimension, and the acquisition proved to be one of the most necessary choices Automattic had ever made. “I’d call it a significant moment, like the birth of a child,” says Mullenweg.