New Funding for Automattic

Automattic

I’ll start with the big stuff: Automattic is raising $160M, all primary, and it’s the first investment into the company since 2008. This is obviously a lot of money, especially considering everything we’ve done so far has been built on only about $12M of outside capital over the past 8 years. It was also only a year ago I said “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.”

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.)

This Series C round was led by Deven Parekh of Insight Venture Partners, and included new investors Chris Sacca, Endurance, and a special vehicle True Ventures created to step up their investment, alongside our existing secondary investors from last year, Tiger and Iconiq. (There is a second close soon so this list might change a bit.) There was interest significantly above what we raised, but we focused in on finding the best partners and scaled it back to be the right amount of capital at the right valuation. Deven and Insight share our long term vision and are focused on building an enduring business, one that will thrive for decades to come.

WordPress is in a market as competitive as it has ever been, especially on the proprietary and closed side. I believe 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. 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!

You can read more about the news by Kara and Liz on Recode: WordPress.com Parent Automattic Has Raised $160 Million, Now Valued at $1.16 Billion Post-Money, on Techmeme, and on the Wall Street Journal.

auto-wp-long-scroll

Scrollkit and Longreads at Automattic

Asides

You might have seen the news last week that Longreads is joining Automattic’s editorial team. Today I’m excited to announce that we’ve acquired Scroll Kit and they’re joining Automattic as well, and will be focused on making customization more visual and intuitive. We’re barely on the second inning of what WordPress could be, and the impact it can have on the world, and I consider myself very lucky to be working with the best and brightest on transforming the way the world publishes.

Why the Web Still Matters for Writing

Essays

I wanted to share unique perspective for why the web matters in an app world with a guest post from Stratechery writer Ben Thompson:

This week Twitter was abuzz with the most recent report from Flurry that showed people spending most of their time on mobile using apps, not the browser:

Time Spent in APps

Many were quick to once again declare “The Web is Dead,” but I’m not sure that conclusion makes sense, at least for writing.

First off, Flurry’s numbers don’t account for webviews within mobile apps. On my site, Stratechery, 37% of my iOS traffic comes from webviews (Android doesn’t break out the difference), which on Flurry’s chart would fall mostly in the Twitter slice. More mass market sites likely take up some percentage of Facebook time, as well.

That said, it’s striking how little written content appears on Flurry’s chart; the only category that is primarily about written content is news, and even that includes video. And yet, pageviews on WordPress.com and Jetpack are up 27% year-over-year, new sites ranging from small blogs like Stratechery to huge sites like FiveThirtyEight continue to launch and grow, and multiple startups (and competitors!) continue to find writing something worth investing in.

So is the web dead or not?

I don’t think so, for a few reasons:

  • The total amount of time spent on a computing device (especially mobile), has and continues to grow significantly. This means that many of the activities on our phones, app or not, are additive to what we previously used a computer for. This makes sense: what makes mobile such a big deal is that instead of a computer being a destination device, it’s now a companion that goes with us everywhere. This is how you square the fact that apps seem to dominate usage even as writing on the web continues to grow. When the entire pie is huge and getting bigger, the total size of any particular slice grows as well, even if it becomes relatively thinner.
  • Although apps take up a huge percentage of total time, a significant percentage of app time is dominated by just two categories: games (32%) and social networks and messaging (28%). In fact, the more interesting juxtaposition raised by Flurry’s numbers is not apps versus web, but games and social versus everything else.YouTube and other entertainment apps form a solid percentage of what is left (8%), but the remainder is a mishmash of utilities, productivity, the aforementioned news, and, of course the web, which could be anything and everything.
  • The single most exciting development when it comes to writing on the web is the democratization of publishing. It it now trivial to start a blog, whether on WordPress.com or another provider, and that has led to an explosion of content. As I wrote on Stratechery in FiveThirtyEight and the End of Average:

    Most of what I read is the best there is to read on any given subject. The trash is few and far between, and the average equally rare. This, of course, is made possible by the Internet. No longer are my reading choices constrained by time and especially place.

    Why should I pick up the Wisconsin State Journal – or the Taipei Times – when I can read Nate Silver, Ezra Klein, Bill Simmons, and the myriad other links served up by Twitter? I, and everyone else interested in news, politics, or sports, can read the best with less effort – and cost – than it ever took to read the merely average just a few short years ago.

    While there is still a lot of work to be done on discovery (I mostly use Twitter, but admit the learning curve is steep), I already find the idea of being constrained to any one channel for reading to be laughably old-fashioned. And yet, that’s exactly what an app is: a single channel for one publisher’s content. Contrast this to the web, where any given piece is available instantly by simply clicking a link.

There is no question that apps are here to stay, and are a superior interaction model for some uses. But the web is like water: it fills in all the gaps between things like gaming and social with exactly what any one particular user wants. And while we all might have a use for Facebook – simply because everyone is there – we all have different things that interest us when it comes to reading.

That’s why very few of us devote all of our reading time to a single general interest newspaper these days, and that’s why we at WordPress.com have no intention of pushing anyone to any one particular platform or app. Instead our focus is on enabling and empowering individuals to create new content that is at home in the mobile browser, the WordPress.com app, Facebook or Twitter webviews, or any other channel that makes sense for the reader. Let the water flow to exactly where it’s needed! That’s the power of the web, and now that a computer is with us in so many more places, we need that flexibility more than ever.

You can read more of Ben Thompson’s writing on his excellent WordPress-powered blog Stratechery, one of my favorite sources for the “why” behind the news.

See also: John Gruber on Rethinking What We Mean by ‘Mobile Web.’