WordPress.com Creator Raises $29.5M
Matt Mullenweg, founder of Automattic and creator of open-source blogging system WordPress, stopped by my apartment earlier this week. Matt, who is one of my closest friends, brought his Texan sense of humor and all-around good cheer …
Context & Ripple Effects
The round closes a chapter opened in November 2007, when Automattic confirmed it had turned down a $200 million buyout offer and that its founders intended to take significant money off the table in a liquidity event. A $29.5 million raise with founders selling shares achieves both goals at once: independence preserved, partial cash-out delivered.
Who is writing the check matters as much as the size. The New York Times Company is part of the investor group per its own report, putting a legacy newspaper into a blog-software firm whose hosted service had already passed SixApart's TypePad as the No. 2 blog host by unique visitors in Nielsen Online's November 2007 count. Coverage traveled far beyond tech blogs the same day, with pickups in the Wall Street Journal and New York Times.
First-order effects
- Matt Mullenweg's Automattic gets $29.5 million in growth capital plus founder liquidity, having converted a rejected $200 million exit into a funded standalone company.
Second-order effects
- SixApart now faces a TypePad rival that is better capitalized and already ahead on traffic, forcing a response on hosted-blogging features and pricing.
- A Times Company stake puts mainstream media money behind the very publishing platform eroding print classifieds and audience — competitors in news will have to decide whether to invest in, license, or fight these platforms.
Third-order effects
- If the pattern holds, media companies respond to disruption by buying equity in disruptors rather than building competing products, and open-core companies fund themselves through hosted services while keeping the software free — the template this round validates.
The trend: Venture capital and legacy media are shifting from acquiring blogging companies to funding them as independent platform businesses, with open-source cores monetized through hosted services.