News & Analysis

driven by the PitchBook Platform

WordPress.com parent Automattic posts $300M at $3B valuation

The parent company of the platform powering a third of the internet has scored a new nine-figure check.

The parent company of the platform powering a third of the internet has scored a new nine-figure check.

Automattic, the parent of internet content management services such as WooCommerce and WordPress.com, has raised $300 million from Salesforce Ventures, Insight, Tiger Global and True Ventures. The company now holds a $3 billion valuation, nearly tripling its estimated 2014 valuation of $1.16 billion.

This marks an unusually large round for Automattic, which was founded in 2005 and is based in San Francisco. Since 2006, the company had raised an estimated $315 million, making today’s new round equal to 13 years of fundraising. Polaris Ventures, Radar Partners and CNET are some of Automattic’s earliest investors, dating back to its $1.15 million Series A at an $8.65 million valuation in March 2006.

Automattic’s chief offering, WordPress.com, provides premium services and value-adds to the free, open-source WordPress framework, which, in turn, provides the content management foundation for over 34% of websites. Many of the company’s other offerings, such as WooCommerce and Simplenote, also operate on a “freemium” model, offering a basic product for free with the option to buy premium features.

Today’s round continues a busy 2019 for Salesforce Ventures, which has participated in over 40 VC rounds this year, according to the PitchBook Platform. Notably, the San Francisco-based venture capital arm of Salesforce forked over $100 million for IPO shares in video conferencing platform developer Zoom Video, priced at $36 apiece. Salesforce Ventures managed to rapidly double its money when Zoom’s April debut saw shares soar 72% in its first day to close at $62. The CVC firm has publicly insisted it will be a long-term shareholder, forgoing quick profits while Zoom continues to trade over $80.

Tumblr purchase

Automattic’s new $300 million injection follows its August purchase of social blogging platform provider Tumblr for mere peanuts, comparatively speaking. Yahoo bought Tumblr for $1.1 billion in 2013; Tumblr was inherited by Verizon when the telecommunications giant acquired Yahoo for $4.48 billion in 2017. By that time, Yahoo had already written down $712 million of Tumblr’s value, partially as a result of disappointing ad sales. Automattic’s acquisition came with a relatively microscopic price tag of less than $3 million, leading some observers to suggest a simple crowdsourcing campaign could have drawn more money.

While Tumblr was well known for allowing adult content on its platform, Verizon banned pornography in December 2018 to allow for brand-safe advertising sales. By March 2019, The Verge reported internet traffic to Tumblr had declined nearly 30%. This was in the ballpark of the estimated 22% of Tumblr users who had previously consumed adult content, according to a January 2017 research study.

Automattic has said it has no plans to lift Tumblr’s porn ban, instead opting to invest in the platform’s core, safe-for-work blogging functionality.

Featured image courtesy of Automattic

  • ian.jpg
    Written by Ian Agar

    Ian Agar was a financial writer at PitchBook covering venture capital.

    A native of Southern California, he joined the US Coast Guard and received his BA in Psychology from American Military University. After leaving the military, he was a writer for SeekingAlpha for over six years covering blue-chip stocks and fast-growing small-cap companies. Although studying charts and financial reports excite him, his wife is his real passion in life—especially when they both spend time studying charts and financial reports together.

Join the more than 1.5 million industry professionals who get our daily newsletter!