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Did Automattic just sell its soul

Mon, 5th May 2014, 19:22

Writing on his blog MA.TT, Matt Mullenweg, founder and CEO of Automattic (the company behind Wordpress) leads off the post with “I’ll start with the big stuff: Automattic is raising $160M”. Matt continues that it’s the first investment into the company since 2008.

Not long ago Matt wrote that “Automattic is healthy, generating cash, and already growing as fast as it can so there’s no need for the company to raise money directly — we’re not capital constrained.”

So in January after eight years at the helm of Automattic, Toni Schneider and Matt Mullenweg switched roles, allowing Schneider to focus on Automattic’s new products, while Mullenweg would oversee the running of the company. At the time Matt stated it was more ceremonial as their roles had always been fluid. What a difference a few months make!

 
 
The 100-day plan
 
Now Matt ‘admits’ that he may have been hasty with some of those aforementioned quotes:  
 
I was wrong, but I didn't realize it until I took on the CEO role in January. Things were and are going well, but there was an opportunity cost to how we were managing the company toward break-even, and we realized we could invest more into WordPress and our products to grow faster. Also our cash position wasn't going to be terribly strong especially after a number of infrastructure and product investments this and last year.
 
So part of my 100-day plan as CEO was to figure out what new funding could look like and we found a great set of partners who believe in our vision for how the web should be and how we can scale into the opportunity ahead of us, though it ended up taking 110 days until the first close. (Our other main areas of focus have been improving mobile, a new version of WP.com, and Jetpack.) 
 
The round of financing was led by Deven Parekh of Insight Venture, as well as some new investors that included Chris Sacca and Endurance, (editor’s note.. Endurance is the mega-host Endurance International Group.. owner of webhosting brands everywhere!), and a ‘special vehicle’ made up of long time backers True Ventures and the existing secondary investors from last year, Tiger and Iconiq. (There is a second close soon so this list might change a bit.)

 

Crystal Ball Time

 

Matt Mullenweg states:

WordPress is in a market as competitive as it has ever been, especially on the proprietary and closed side. He believes WordPress will win, first and foremost, because of its community — the hundreds of core developers and large commercial companies, the tens of thousands of plugin and theme developers, and the millions of people who build beautiful things with WordPress every day. (editors note: I’m sure some Drupal fans somewhere would disagree)

Automattic is here to support that community and invest the full strength of our resources to making WordPress a better product every day, bringing us closer to our shared mission of democratizing publishing. But a majority of the web isn’t on an open platform yet, and we have a lot of work ahead of us. 

 

Back to it!

Despite some wannabe wordpress competitors like Weebly, Squarespace, and Medium raising some serious cash, wordpress still continues to power, more or less, 25% of the websites on the internet. While Matt Mullenweg is undoubtedly a purist in his quest to ensure an open web, (as are the countless evangelists of the wp platform), it remains to be seen whether the investors and shareholders surrounding the company he has built from the ground share that same vision…

(the editor ponders one last time: One of the webhosting company’s recommended by Wordpress is BlueHost. Possibly that will change now Mega-host Endurance International Group owns a piece of the Automattic pie. )

“To sell your soul is the easiest thing in the world. That's what everybody does every hour of his life. If I asked you to keep your soul - would you understand why that's much harder?”

Ayn Rand, The Fountainhead

 

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