Automattic, parent company of WordPress.com as well as the lead developer on the WordPress platform, announced today that they had raised $160 million in new capital.
According to a blog post by Automattic CEO Matt Mullenweg, the round was led by Insight Venture Partners and included existing investors True Ventures, Tiger Global Management, and Iconiq, as well as new investors Chris Sacca and Endurance.
Automattic plans to use the new capital to continue to fund its expansion efforts. "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, " Mullenweg wrote in his post.
WordPress powers 22% of the world’s top 10 million websites, according to W3Techs, and Automattic's WordPress VIP service also hosts some of the web's largest news sites, including, TechCrunch, MediaBistro, and others.
In addition to hosting and developing WordPress platform, Automattic also offers a number of services including Akismet spam), Polldaddy, Intense Debate (comment management), VaultPress, Cloudup, and more. A few weeks ago they acquired Longreads, a curation service which shares links to long form content.
Following $29.5 million raised in 2008, this is the nine-year-old company's third
second funding round, and it values the company at $1.16 billion. Given Automattic's many different activities and the fact that it has been self-funding, the company is either radically undervalued when compared to Tumblr (which sold for $1.1 billion in 2013) or Yahoo overpaid. I lean towards the latter.