Can social and e-commerce transform the future of the open web? – TechCrunch
Automattic EC-1 Part 3: Acquisitions and Future Strategy
Despite the respect of Automattic position, awareness of its myriad of activities tends to be uneven.
“I spend a lot of time with investors, news and research analysts, and I’m always amazed when people say, ‘We know WordPress. But they don’t know Woo, ”says Mark Davies, Automattic’s CFO, referring to the company’s WooCommerce subsidiary. “It’s always interesting to say that we have a payment volume of $ 30 billion through Woo and Automattic. “
Why should they care? For starters, WooCommerce is used by more sites than Shopify – which these same investors, press, and analysts are certainly familiar with.
It’s also the lifeline Automattic needs this decade to rebuild the internet in an open direction. Sixteen years after its creation, the company has seen its valuation jump quickly from $ 3 billion with a funding round led by Salesforce in 2019 to $ 7.5 billion with a share buyback a few months ago. This growth was based on expanding beyond its traditional publishing mandate into the hugely lucrative e-commerce terrain, as well as through the acquisition of Tumblr.
The strategy here is simple: to continue opening up larger swathes of the internet to open source innovation outside the walled garden platforms developed by Amazon and Facebook. If Automattic’s strategy works, Woo, Tumblr, and WordPress will tie into new services that no one associates with Automattic yet.
It’s a bold vision, but the company is gearing up for a battle against some of the most formidable – and wealthy – companies in the tech world.
Custom themes with billions of payment volumes
WooCommerce started life as WooThemes, a small design company that didn’t look much different from the many others that made WordPress themes. In 2011, the company expanded to create themes for online stores.
“They had spotted an opportunity where a lot of the themes they were selling were more trade-focused. attention, ”says Paul Maiorana, the current CEO of WooCommerce, a subsidiary of Automattic.
Despite the popularity of WooCommerce (its plugin was in the top 10 for WordPress), its success was mostly contained within the larger WordPress ecosystem. When Automattic acquired WooCommerce in 2015, the movement went almost unnoticed in the wider tech community.
WooCommerce still had less than 100 employees and it didn’t seem like a major purchase. E-commerce, while obviously growing, had not yet reached stratospheric heights.
Internally at Automattic, there were uncertainties as to whether WooCommerce was worth buying, the value of which was never disclosed but was described to TechCrunch at the time as “the biggest acquisition by Automattic to date. “.
“Even at the board level, we honestly asked if we should even do it. Everyone says it’s a bad idea and you can’t compete with Amazon, ”recalls Matt Mullenweg, founder and CEO of Automattic. The opposite view was that it was important for Automattic to cover all of its bases. “Our ambitions are incredibly broad and we take a very long-term view.”
In no time, WooCommerce exploded in size and the acquisition turned out to be one of the most important decisions Automattic ever made. “I would call it an important moment, like the birth of a child,” says Mullenweg.