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With almost every company adopting digital transformation initiatives and growing demand for e-commerce websites, the global market for web development services is increasing exponentially. Web development services include creating websites hosting, and maintaining them.
Initially, people considered publications and journalism as the only legitimate news sources. But Matt Mullenweg saw the potential of blogging ahead of time and, thus, came up with Automattic. The company develops software that provides everyone with web development and hosting services.
In this article, we’ll break down Automattic to find out its startup story, founders, funding, partners, growth, challenges, business model, and more.
Automattic – Company Highlights
| Company Name | Automattic |
|---|---|
| Headquarters | San Francisco, California, United States |
| Sector | Web Development Software |
| Founders | Matt Mullenweg |
| Founded In | 2005 |
| Valuation | $7.5 billion (2022) |
| Website | Automattic.com |
Automattic – About
Automattic – Industry
Automattic – Founders and Team
Automattic – Startup Story
Automattic – Mission and Vision
Automattic – Business and Revenue Model
Automattic – Products and Services
Automattic – Challenges Faced
Automattic – Funding and Investors
Automattic – Mergers and Acquisitions
Automattic – Growth
Automattic – Partners
Automattic – Awards and Achievements
Automattic – Competitors
Automattic – Future Plan
Automattic – About
Automattic Inc. provides web development services. It’s a parent company of content management system provider WordPress. The open-source CMS powers approximately 455 million websites worldwide and sees 20 billion page views monthly.
Moreover, Automattic’s e-commerce platform, WooCommerce, backs over a quarter of the top 10 million e-commerce sites. Facebook, Microsoft, Spotify, and Salesforce are some of the company’s top customers.
Automattic – Industry
Web development is about designing and developing websites and software for individuals and companies in multiple industries. The industry’s global market size is anticipated to grow from $60.71 billion in 2022 to $96.75 billion in 2028, with a CAGR of 8.08%.
Covid-19 forced all industries to go digital, which resulted in market growth. With more and more companies operating via e-commerce platforms, the demand for web development and hosting services has surged significantly. Automattic, Classic Informatics, Simform, Iflexion, OpenGeeksLab, SPEC INDIA, and Powercode are major players that captured the web development market.
Automattic – Founders and Team
Matt Mullenweg is the Founder of Automattic Inc. He is an American entrepreneur and web developer who attended the University of Houston. Currently, Mullenweg is the Board Member at ecoAmerica and the New Museum of Contemporary Art. In addition, he holds the position of Lead Developer at WordPress and CEO at Automattic Inc.
Automattic Inc. is a globally distributed company with a team of 2,000+ employees in 84 countries, speaking over 90 languages.
Automattic – Startup Story
When working at CNET, Mullenweg also worked on WordPress. During that time, he noticed that the company owned a handful of domains from their acquisitions, and ‘online.com’ was one of them. According to Mullenweg, it was perfect for developing a more accessible version of WordPress, allowing users to start a blog in just a few clicks without any coding.
However, just like the entire industry, CNET didn’t see the potential in blogging and, thus, was not on board with Mullenweg’s idea. Mullenweg was determined and quit his job after wrapping up his projects with CNET. He incorporated a new startup named Automattic alongside with few of his fellow WordPress developers.
When working at CNET, Mullegweg discovered that the platform used to battle with spam bots on sites that allowed comments. And this is what led to his company’s commercial product, ‘Akismet,’ a spam filter that could be used for WordPress and other blogging software.
Automattic was officially launched in 2005, with Akismet as its first product. In September 2010, Automattic transferred the WordPress trademark and control over bbPress and BuddyPress to the WordPress Foundation. Moreover, in November 2016, Automattic managed the launch and development of the .blog gTLD via a subsidiary company (Knock Knock, WHOIS There).
Automattic – Mission and Vision
Automattic aims to make the web better. It is committed to diversity, equity, and inclusion, with a common goal of democratizing publishing and commerce to enable every individual with a story to tell it, anyone with a product to sell it, regardless of gender, language, income, politics, or where they live across the world.
Pratyusha Srivastava
Automattic – Business and Revenue Model
Now that starting a WordPress site is completely free, Automattic generates five main revenue streams:
WordPress Plans
WordPress.com has a freemium version, but users can subscribe to three premium plans to gain more control over WordPress sites. With paid WordPress plans, users can create a higher-quality website.
VIP
Automattic offers a subscription-based model with monthly VIP hosting plans starting at $15,000.
Premium Themes
Users can choose free and premium themes provided by WordPress and other third-party companies. Automattic earns profits or commissions from each theme sold.
Advertisements
Automattic also earns money through the free plan of WordPress by selling advertisements on websites.
Revenue from Other Sources
Apart from WordPress, Automattic also generates revenue via:
Premium Plugins
Automattic charges for Jetpack, Akismet, Polldaddy, WooCommerce, and many other premium plugins.
Referral
Affiliate marketing is another revenue source for Automattic. The company links to the WordPress hosting providers on its sites and earns a commission when a referred individual purchases the site.
Guided Transfer
The one-time fee for guided transfers is C$169.00 per blog.
Automattic – Products and Services
Automattic provides blogging services such as VIP hosting and a VIP support program. Its most notable offerings include WordPress VIP, Jetpack, Longreads, Simplenote, Tumblr, The Atavist, Crowdsignal, Pocket Casts, and more.
Automattic – Challenges Faced
One major challenge that Automattic faced during the initial phase of incorporation was that it created a commercial counterpart to an open-source project that could be used and modified for free. People were quite apprehensive about the idea.
The company’s second challenge was when it launched, and its first employee resided in Ireland. It’s when Automattic’s employees worked from Vermont and Texas while Mullenweg was in San Francisco. Since the idea of remote work was not mainstream, people couldn’t see this work model as a productive one.
Automattic – Funding and Investors
Automattic has undertaken 12 funding rounds and raised $985.9 million. The company’s latest funding was conducted on February 17, 2021, and raised $288 million from a Venture Series Unknown. Avant Global, BlackRock, Schonfeld Strategic Advisors, ICONIQ Capital, Alta Park Capital, Insight Partners, and True Ventures are some of the 28 investors that fund Automattic.
| Date | Round | Number of Investors | Money Raised | Lead Investor |
|---|---|---|---|---|
| February 17, 2021 | Venture Round | 7 | $288 million | Alta Park Capital, BlackRock |
| May 15, 2020 | Secondary Market | 1 | – | – |
| December 11, 2019 | Venture Round | – | $80.6 million | – |
| September 19, 2019 | Series D | 17 | $300 million | Salesforce Ventures |
| May 5, 2014 | Series C | 5 | $160 million | Insight Partners |
| September 17, 2013 | Secondary Market | 2 | $75 million | Tiger Global Management |
| May 24, 2013 | Secondary Market | 1 | $51.7 million | Tiger Global Management |
| May 3, 2012 | Venture Round | 1 | – | – |
| March 22, 2011 | Secondary Market | 1 | – | Akkadian Ventures |
| January 1, 2008 | Series B | 4 | $29.5 million | Polaris Partners |
Automattic – Mergers and Acquisitions
Automattic acquired 25 organizations:
| Company | Announced Date |
|---|---|
| Social Image Generator | September 8, 2021 |
| Frontity | August 30, 2021 |
| Pocket Casts | July 16, 2021 |
| Day One | June 14, 2021 |
| ZBS CRM | August 16, 2019 |
| Tumblr | August 12, 2019 |
| Prospress | May 23, 2019 |
| Atavist | June 21, 2018 |
| WooThemes | May 19, 2015 |
| Code For The People | November 6, 2014 |
| Longreads | April 4, 2014 |
| PollDaddy | November 15, 2008 |
| Intense Debate | September 23, 2008 |
| Gravatar | October 18, 2007 |
Automattic – Growth
The annual revenue of Automattic in 2022 was approximately $155 million. The company’s post-money valuation grew from $3 billion in 2019 to $7.5 billion in 2022.
Automattic – Partners
Automattic has partnered with 14 companies with 8 technology and 6 channel partners. Here listed are its leading partners:
- Cloudflare
- 10up
- Human Made
- Alley Interactive
- inSourceCode
- Oomph
- Range
- Voce Communications
Automattic – Awards and Achievements
Automattic is honored with several awards and recognitions and some of these are:
- Best Practice Institute research and analysis certified Automattic as the Most Loved Workplace in 2022.
- In 2016, Matt Mullenweg received the 21st Heinz Award for Technology, the Economy, and Employment category.
- Awarded prestigious Coveted Spot on Forbed Cloud 100 list in 2014.
Automattic – Competitors
Major competitors of Automattic are as follows:
- Squarespace
- Wix.com
- Shopify
- Acquia
- Bluehost
- Jimdo
- Tumblr
- UpCloud
- ServerGuy
- WebhostUK
Automattic – Future Plan
Automattic wants 85% of the world’s sites to be powered via its open-source content managing system.
FAQs
Who is the CEO of Automattic?
Matt Mullenweg is the founder and CEO of Automattic.
What does Automattic do?
Automattic Inc. provides web development services. The open-source CMS powers approximately 455 million websites worldwide and sees 20 billion page views monthly. Moreover, Automattic’s e-commerce platform, WooCommerce, backs over a quarter of the top 10 million e-commerce sites.
Who are the main competitors of Automattic?
Major competitors of Automattic are as follows:
- Squarespace
- Wix.com
- Shopify
- Acquia
- Bluehost
- Jimdo
- Tumblr
- UpCloud
- ServerGuy
- WebhostUK