$WORD Automattic PRE-IPO (Forecast Q4 2021 or Q1 2022)
Automattic develops publishing platforms, including the WordPress.com website and the VIP WordPress.com cloud version. Automattic, the company behind WordPress, last year raised $300 million from Salesforce Ventures at a valuation of $3B.
- Founded Date — 2005 (HQ, SF, CA)
- Founders —Matt Mullenweg
- Anticipated ticker: $WORD or $WOPR
- Last year, it launched Happy Tools for companies with a remote or globally distributed workforce.
- Automattic makes its money from subscriptions to tools on its platform, advertising on user sites, and by charging media companies to run their blogging platforms.
- Automattic owns Tumblr, Zero BS CRM, Atavist, Parse.ly, Longreads and other well-known products.
According to W3Techs, WordPress is used by 35% of all websites and it dominates the content management system market with a market share of 62.3%. Automattic, the company behind WordPress, last year raised $300 million from Salesforce Ventures at a valuation of $3 billion.
Open source WordPress is the most popular online publishing platform, currently powering more than a third of the web. They wanted to bring the WordPress experience to an even larger audience. Overall, the WordPress.com network welcomes more than 409 million people viewing more than 15.5 billion pages each month. WordPress users publish about 41.7 million new posts and leave 60.5 million new comments each month.
The mission is to democratize publishing one website at a time.
The company had 1,273 employees as of Sep 2020. Its remote working culture was the topic of a participative journalism project by Scott Berkun, resulting in the 2013 book The Year Without Pants: WordPress.com and the Future of Work (source).
Funding traction, total raised ~$697.9M + private transactions
Supported by: Insight Partners, True Ventures, Radar Partners, ICONIQ, SalesForce Ventures, Lowercase Capital, Savano Capital Partners, Polaris Partners, Tiger Global Management and etc.
- Series A — 2005 at val. $3.9M, $0.10 pps
- Series B — 2008 at val. $210M, $4.06 pps
- Series C — 2014 at val. $1.2B, $18 pps
- Series D — 2019 at val. $3B, $45 pps
Trading at $66 — $72 in the secondary market (Feb ‘21)
Over the course of nearly 15 years, Automattic has acquired 20 companies and built a strong portfolio for its platform. It offers long-form content platform Longreads, note-taking app Simplenote, a drag-and-drop file-sharing platform called CloudUp, a collaborative translation tool called GlotPress, and a survey-creating platform called Crowdsignal (formerly PollDaddy).
Last year in May 2019, Automattic acquired subscription payment company Prospress that had developed a recurring payment solution for WooCommerce. Prospress also has a marketing automation tool for abandoned carts, follow ups, and cross-selling. The Prospress is a strategic acquisition that will help Automattic own a bigger pie of the e-commerce stack. Terms of the deal were not disclosed. Founded in 2013, Prospress has an estimated annual revenue of $2 million and competes with Saucal.
In August 2019, Automattic acquired CRM plugin Zero BS CRM for an undisclosed sum. Zero BS CRM is a WordPress-based freemium plugin with more than 30 commercial extensions that provide deeper integrations with third-party services. Automattic plans to integrate it into Jetpack and will be known as Jetpack CRM. Founded in 2016, Zero BS CRM has an estimated revenue of $1 million and competes with WPREP.
In August 2019, Automattic also acquired micro-blogging and social networking platform Tumblr for an estimated $3 million. Founded in 2007, Tumblr was acquired by Yahoo! for $1.1 billion in 2013, but Yahoo! wrote down $712 million of its value in 2016. It was acquired by Verizon in 2017. As of August 12, 2019, Tumblr hosted over 475 million blogs. Automattic Founder-CEO Matt Mullenweg has said that Tumblr will operate as a complementary service to WordPress.com.
Projects and Experiments
- After the Deadline — online proofreading tool now built into WordPress.com and Jetpack
- Atavist — multimedia publishing platform
- Akismet — anti-comment spam system capable of integration with many blogging platforms and forums
- bbPress— forum software
- blo.gs — RSS feed aggregator
- BuddyPress — social networking plugin suite
- Cloudup— file sharing application
- Crowdsignal (formerly Polldaddy) — polls and survey tools
- GlotPress — collaborative translation tool
- Gravatar — globally recognized avatars
- HappyTools— resource planning software
- IntenseDebate— a blog comment hosting service that was launched as a private beta in January 2007 by Co-Founders Jon Fox, Isaac Keyet, and Josh Morgan, and launched as an open beta on October 30, 2007. On September 23, 2008, Automattic announced its acquisition of IntenseDebate’s properties and returned to private beta until November of that year. In 2007, IntenseDebate was selected to be part of the first class of Techstars, a Boulder, Colorado-based startup accelerator.
- Jetpack — a WordPress plugin providing a range of basic services (backup, speed, stats, etc.).
- Longreads— original reporting and journalism aggregator
- Mongoose ODM — elegant mongodb object modeling for node.js
- Poster — A blogging app for IOS
- Ping-O-Matic — pinging service
- Simplenote — note-taking and sync service acquired by Automattic in 2013 and later open-sourced.
- Scroll Kit — A code-free web design tool
- Tumblr — Micro Blogging platform
- VaultPress— backup and security service for WordPress sites
- VideoPress— hosted HD video for WordPress sites
- WooCommerce — eCommerce plugin for WordPress with a marketplace for extensions
- WPVIP — Enterprise WordPress hosting, support, and consulting
Competitors include Joomla, Drupal, Squarespace, Wix, and Shopify.
Automattic makes its money from subscriptions to tools on its platform, advertising on user sites, and by charging media companies to run their blogging platforms. It is estimated to be profitable and to have annual revenue of $120 million.
The new funding will help Automattic scale and grow its business across its ecosystem. Following the funding, Automattic has announced the appointment of Mark Davies as its new CFO.
Automattic is a great example of a capital-efficient company that has scaled to dominate not just the world of publishing but also its ecosystem.
Unfortunately, this information could not be disclosed. Please contact the corporate and finance department directly if you are interested in Automattic shares.
About the Author
Mr. Koch — a serial entrepreneur and late-stage investor specializing in secondary shares.
Previously: Twilio, Xiaomi, iQiyi, Tilray, Livongo, Bandwidth, Hims.
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