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Sarah Gooding

Automattic Acquires WooCommerce

photo credit: Ma.tt - "A Celebratory Toast
photo credit: Ma.tt – “A Celebratory Toast

Automattic CEO Matt Mullenweg announced today that the company has acquired WooCommerce, WordPress’ most popular e-commerce platform. The plugin recently passed seven million downloads and stats from BuiltWith show that WooCommerce is dominating global e-commerce platforms, powering roughly 30% of all online stores.

This is Automattic’s largest acquisition to date, bringing 55 new employees into the company from 16 countries for a total of 370 Automatticians. Mullenweg confirmed that the acquisition includes Woo, Sensei, and all of the other plugins and themes.

Given WooCommerce’s extensive adoption on the web, Automattic will not be re-branding the newly acquired products. WooThemes and WooCommerce will continue to be sold via their dedicated websites.

“We’re planning on retaining (and growing) the WooCommerce brand,” Mullenweg told the Tavern. “The plan is to keep what has been working going.”

Mullenweg has spoken frequently over the years about growing Automattic’s reach into global commerce, but few could have predicted that the company would acquire Woo as opposed to building its own in-house commerce platform.

“They have a full team that goes to bed every night and wakes up in the morning thinking about commerce; it’s core to their DNA,” Mullenweg said. “That’s better than starting it in-house. Also they have a ton of adoption already.”

In April, WooThemes co-founder Magnus Jepson told the Tavern that WooCommerce accounts for over 85% of overall sales and processes “several million dollars per year.” Jepson also confirmed that WooCommerce’s revenue “has been climbing steadily over the past few years, and we are regularly breaking monthly revenue records.”

Automattic is not releasing the financial details of the acquisition, but Re/code speculates that it was in the range of $30 million:

Sources say Automattic will spend more than $30 million in cash and stock to buy the 55-person company. Automattic CEO Matt Mullenweg wouldn’t comment on the price but said the acquisition was the largest his company had made, ‘by about 6x.’

In addition to growing the current WooCommerce customer base, Automattic is looking to use the platform to add more selling options for WordPress.com customers, while retaining its existing e-commerce partnerships.

“Partnerships will remain in place on WP.com, but long-term we’d like to offer Woo as an option there as well,” Mullenweg said.

When asked about plans to integrate WooCommerce into Jetpack, he said, “Jetpack could definitely complement WooCommerce (and WooThemes), but not the other way around.”

WooThemes founders never imagined that WooCommerce would rise to the level of popularity that it has, ultimately bringing them into the Automattic family. Co-founder Mark Forrester writes:

In 2008, as three strangers in three countries, we set out on a quest to pioneer WordPress commercial theming, never dreaming of the rocket-propelled voyage into the self-hosted eCommerce unknown that lay ahead. It’s been an incredible ride, backed by a unique community, and here we find ourselves powering over 24% of online stores with our flagship product, WooCommerce.

The acquisition affects a whole fleet of third-party designers and developers who create products for WooCommerce. They will likely have more opportunities and sales ahead of them with the power of Automattic behind the core plugin. Mullenweg confirmed that the next WooConf, scheduled to take place in Austin in November, will continue on as planned. Those who are heavily involved in the WooCommerce ecosystem will still be able to connect and build for the platform as they have done previously.

Democratizing Selling with WooCommerce

With Automattic now at the helm of the most dominant e-commerce platform on the web, it will be interesting to see if the company can make selling online just as simple as it has made publishing online. WordPress.com’s tremendous success can be partially attributed to the company’s commitment to democratizing publishing.

“I do believe that the web needs an open, independent and easy-to-use commerce platform that you can run yourself on your own website,” Mullenweg said in his video announcement, the first video ever to be published to Automattic’s YouTube account.

Publishing products and selling them on the web is arguably a more complex endeavor than simple publishing, especially when you factor in location, tax, payment gateways, and everything needed to process transactions. The average non-developer has no concept of what it takes to set up a blog, let alone an online store. But if Automattic can play a part in democratizing the ability for regular folks to sell products online, it has the potential to globally transform e-commerce.

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78 responses to “Automattic Acquires WooCommerce”

  4. This is great news and thanks for the post.. sure it will answer some questions already bubbling within the community ;)

    Having worked closely with Woo last few years and getting to know the entire team, it obviously is going to be a great asset to Automattic. And likewise, I’m sure :)

    Excited to see what the future holds around all of this.

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    • Remember this is open-source land, though. The value of open-source code for acquisition purposes is zero. Worse, because of the GPL the value of all the future code they produce is also worth zero (it obviously *provides* value, but it’s still worthless to an acquirer) Only the trademark and active customer accounts give the company value.

      In valuing the company Automattic had to answer the question: “How much is woocommerce worth to us that is more than we would gain by simply forking and rebranding the project ourselves?”

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    • @joeseph

      While the Zen / OSCommerce deal is like Jurassic time in web terms what you say is true. Marketing. Public perception is a core aspect thereof though there are considerably more.

      Matt & crew appear to be well sighted into what the not so far future will be bringing forth.

      WordPress is one of perhaps 15 or 20 Open Source without pretenses projects out there that stands a good chance at not only surviving what is coming but also thriving within that new ecosystem on the horizon of the Internet.

      The acquisition was a VERY smart move. As I’ve noted before, I am not sanguine towards CMS integration with eCommerce. Not principally mind you but due to implementations. Principally it makes of course TONS of sense. Rich content alongside marketable hard goods or soft goods is an obvious no brainer, Amazon is living proof. What sets Woo Commerce ahead of the usage curve in eCommerce is WordPress. The ability to design contextual rich content around the merchant brand and hard/soft goods.

      Implementation wise traditionally in CMS eCommerce the data such as customer orders, addressing etc. sits within the same database as the CMS content. Thus a security hole in any plugin may result in access to what is construed private information. I am sure Automattic will move towards getting that data secured and ciphered. This is going to become a legislative matter (as well as other matters such as Brand authorizations etc) in scant time. In other words, eCommerce standards are going to change and the changes “of course” favor the big guys.

      eBays spinning off of PayPal is not simply a eBay business decision. Its just as much if not more so a decision based on whats coming down the pike.

      There are many reasons behind it, some sorta “eh? Really?” and many really valid albeit perhaps sad. Counterfeits for example, certainly a valid reason for Brands to enforce their rights. Authorized resellers / distributorships is a rather sad tale. But it also ranges from counterfeits and more. The “more” being things such as eBay. For years they have tried reign in issues, many many issues that just continue to come forth. Now, its slated to change. Thats what Omni Channel is all about. Wasnt like eBay wanted spend billions and billions and billions of dollars on it. Its their future. PayPal doesnt have a spot in that so business wise, smart to spin it off. But there is more in as far as these brand and other matters manufacturers are hitting hard upon both in their own capabilities but towards legislators as well.

      Additionally what coming forth can be of huge grace to some entities. Walmart for example in their online capabilities.

      If Automattic does this all right, I could show Automattic how to make more revenues than WordPress itself ever generate. Literally nickles .vs. thousand dollar bills.

      Not done right, welp, Amazon, Alibaba, Walmart (thats right, Alibaba) will cream all players. Alibaba did not buy Auctiva and Volusion to have a toy and they according to analysts are slated to be in the 400+ billion dollar revenue zone by years end last I’d read. Thats #2 behind Walmart globally. All sorta “planned” unfolding pretend drama awaits the future by powers that be.

      I’d love speak with Matt about it.

      The internationalization of plugins, templates etc, also, excellent move. Its VERY important for this ecosystem of WP to not sit back and let time pass towards significant forward movements.

      The Internet ecosystem is facing alot of change in the not so distant future. Its extremely important for a leadership role that WordPress enjoys CLEARLY more so through Automattic than external influences to solidify or perhaps a better term entrench as more than anyone here probably would realize may depend upon it.

      Kudos Matt & company. VERY well directed moves.

      I have several (many several in fact) other shall we call them “issues” or “opportunities” (perhaps both be better) that I as a puny tot could never pursue but for Automattic be HUGE in solidification and entrenchment that I can assure you “the big boys” have not thought of. At least, not yet.

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  9. Very interesting! I’ve always had mixed feelings about this plugin. It’s very good in many ways.

    I have a sort of sideline business filling in its gaps. :) It does have a decent number of hooks, pretty fair documentation, and my interactions with the staff have been pleasant. I’m not a client of theirs per se, but have learned its innards when clients asked for help with it.

    Sensei could use some improvements – it’s lagging behind the mothership, and most inquiries I get have to do with that.

    All their products could use more hooks! Telling clients to do “display: none” on parts of it is just too cheesy. :)

    I’ll be very interested to hear what happens now that they’ve been subsumed. Most corporate takeovers spin themselves as “synergy”, economies of scale, the usual crap, when it’s really just a money grab or elimination of competition. Fortunately, I think that Automattic will be a more constructive overlord than that.

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    • Good one. Hopefully, yes. But,… there are several third parties making more than a penny or two on that addons, and what is currently not free, would be tricky to liberate as 100% free. Think what will have to say those users with licenses purchased within the last year? Happy to be your last payment? I’d like to hear more opinions by end customers, preferably those with licenses for multiple sites.

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    • The rumor that he doesn’t like commercial themes and especially plugins is unfounded. He simply doesn’t want plugins sold on WordPress.org. He does have philosophical differences between the two, but the idea he doesn’t like them is not part of the equation.

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      • Well in the past that has been the common impression and still is. He has nothing against SaaS solutions but plugin themselves that are closed and commercial have always seemed to annoy him. Its one of those perplexing GPL things. We love the GPL so much that we prefer SaaS so we dont have to give our code away =).

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    • I am totally comfortable with Automattic making money by offering WooCommerce on wordpress.com. It could benefit a huge number of novice users who need some Ecommerce functionality but are not yet ready to run a wordpress.org install.

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  13. One of WordPress’s open areas has been monetization (with WordPress.com generating the vast bulk of Automattic’s coffers). Now they can sell Woo Themes, offer a diluted version through WordPress.com, sell premium Woo themes and find other ways to add an additional stream of revenue to Automattic that wasn’t there before. I’m sure the pros and cons of the acquisition were well thought out in advance of the offering and you’ll see a very gradual roll out of Woo branded offerings and expansion into the WordPress/Automattic family with integration into JetPack for Woo-lite and then levels of premium services, etcetera

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  14. What does this mean for all the other ecommerce plugins? It’s pretty much going to wipe them out. It’s not a good business for them to be in anymore. I know this is life, especially in the dog eat dog world of business, but be nice if Automattic was bit more altruistic. I wonder what 2003 Matt Mullenweg would think.

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    • I run one of the other e-Commerce plugins and am not concerned. Will it changes things? Absolutely. Will it kill us all off? Absolutely not.

      Part of running a successful business is adapting to changes. If this requires that we make some changes to our business, that’s exactly what we will do.

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    • I’d echo what Pippin is saying, for WP eCommerce.

      We are now the largest independent eCommerce platform for WordPress. Times are changing, that’s for sure, but I firmly believe that this is an opportunity for all of us to continue to innovate.

      A big fish just got bigger – but the ocean we’re in is vast – more so that most of us can imagine.

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    • Jetpack has forms. Did that wipe out Gravity Forms? There’s also Ninja Forms, Formidable, etc.

      This won’t wipe out the competition. If competition were to disappear i’d fear for the health of WordPress as a platform and ecosystem. Competition is healthy.

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    • I can understand why someone might think that the acquisition spells trouble for all of the competitors of WooCommerce. The logic goes – growing company now has tons of resources at its back, everyone else will be demolished. While I get the logic, my experience has often been the opposite (though I’m not trying to curse the acquisition at all).

      Over the last twenty years, most of the acquisitions of software companies I’ve seen has resulted not in massive growth, but instead in slow growth or complete languishment. This is often the case because cultures have to be merged. Teams have to be assigned tasks (and it’s not always tasks focused on the newly acquired software). Roadmaps and product direction gets mired in meetings and debate and politics. And more.

      Now, I think Automatic is better than all that. I think they can skip over much of that. But they have their own track record of buying companies that don’t turn into category killers (i.e. Intense Debate). Pretty sure Disqus didn’t die because of that purchase.

      Obviously the acquisition was thought thru by some very smart people and they have some plans. I can also assure you that hope and excitement are at their pinnacle because the real work starts today and tomorrow and suddenly everyone’s hopes will be brought back to the reality of 1000 little issues to work thru.

      So while we should all hope for the best and wish them well, and watch as they do amazing things, I wouldn’t recommend that companies close up and cede ground to this recent news. It will make things different but it doesn’t mean it will remove the opportunities that abound in eCommerce right now.

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      • Even beyond that, eCommerce in the WordPress space has always been tremendously varied.

        WooCommerce works superbly well for many use cases — but if you’re just starting out, and you’re only ever going to offer downloaded ebooks or music or something, nine times out of ten I’ll recommend Easy Digital Downloads instead of WooCommerce.

        If you’re a blogger than just wants to sell a couple odd items in your normal blog posts? Sure, give Cart66 a look instead.

        There are many different eCommerce solutions for WordPress, and they all serve a different group far better than the others, and I don’t think WooCommerce getting the backing of Automattic will result in EDD or Cart66 or others being any less useful for their target markets.

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    • Thanks Pippin, Carl and Chris for chiming in. It’s good to hear your voices on this.

      I recently signed up with EDD and aren’t too worried about it because it has it’s own niche (highlighted by the fact when I enter “ecommerce” as a keyword in the plugins search, EDD doesn’t show on the first 4 pages of results – then i gave up)

      But as a developer, I’ll be doubling my efforts on WC compatibility for my own plugin thus becoming free advertising for WC at the expense of other players. I don’t think I’ll be alone.

      And I know when I go to “Add plugins” Woo Commerce will now appear alongside Akismet, JetPack, and Super Cache on that first screen.

      Unless you were really well established, like EDD, I think it’s going to become a bigger battle than ever.

      (Carl – bit cheeky. Comparing JetPack forms to Gravity is like comparing a chiselled stone tablet to an iPad!)

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  15. Novice users should not use WooCommerce, instead they should use third-party e-commerce platform such as Shopify, Magento to let them handle all the hassle. WooCommerce is easy to set up, but not the best solution for serious e-commerce, at least at this moment.

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  17. I suppose I’m probably the only one not happy about this acquisition.
    Given how much Automattic’s products eat away your visitors’ privacy (as well as your own), It’s kinda sad to see another good product going into “this” direction.

    Oh well, there are always alternatives I guess…

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  18. I really hope WooCommerce doesn’t merge with Jetpack. I’m on a shared server and the hosting company blocks Jetpack. I also lost access to my WP.com account when I changed my phone.

    I am worried that I won’t be able to use WordPress anymore the more plugins Automattic gathers.

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  19. How interested is Automattic in the themes side of things? In Matt’s posts, he only mentions WooCommerce and e-commerce, but over on the WooThemes site, it’s says the Automattic bought WooThemes, not just WooCommerce.

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  21. I’ve been using WooCommerce to set my clients up with e-commerce for almost four years now, and I’m not quite sure what to make of this acquisition. I think WordPress and WooCommerce are both fantastic products with fantastic teams behind them, so for now I’ll just keep doing what I’m doing, and I’ll wait to freak out until it looks like quality is dropping in either one (which I honestly don’t expect will happen).

    Cheers to both parties, and I hope it’s a successful partnership.

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  24. I’ve only just seen this (a bit late to the party). I think this is a great move for Automatic. I can completely see the sense in it, especially as WooCommerce is starting to dominate the eCommerce space.

    From a WordPress users perspective this can only mean good things to come as tighter integration between them is bound to result. Hopefully, this will mean both WordPress and WooCommerce improving terms of capabilities and efficiency.

    From a designer / developer perspective, I’m sure more hooks will become available and greater customisation capabilities will start to appear in plugins and themes.

    All-in-all most sides of the WordPress community should experience some positives from this.

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  26. Theme’s in eCommerce should always be consistent, people are there to shop. What matters most is having great backend support abilities, security that can be promoted in as far as marketing, obviously, good stuff and good prices and rich forms of support content for the products.

    When Amazon rolls out its next incarnation of eCommerce Amazon Web Stores integrated with the marketplace (and then some++) you will see exactly what I mean. RIght now they are integrating all Amazon International commerce sites into a unified vendor experience.

    Its one of the “oopsies” when operations try measure how many installs of this or that and their percentile of market. Those numbers are completely 110% way way off. Amazon has more merchants on their store platform than all others combined. Amazon has more vendors in ts marketplace than anyone really realizes, millions and not just 2 million. Some say upwards of 70 million, I’d estimate more like 15-25 million (globally).

    My guess is Amazon will by this time next year be offering webstores to any marketplace vendors as part of their pro seller subscriptions for a very minimal fee. They will then roll out their online publishing platform and all stores using the Amazon Payments, FBA options and A-Z claims system. Everyone else can go home at that point.

    Its why I said, “Woo w/ Automattic has a tremendous opportunity” here, but, time is critical and everything has to be done right, first time, its a very sizeable bit of work, can have zero flaws, properly staged on and on. $30 million turn into 300 Billion and it cant fail. That is to say, not the software, the opportunity… it cant fail if done right and its not “gee lets make webstores”. Uh uh.

    Its also not “Gee, lets have designers freelancing themes and plugins” for Woo. Nope, that’d need end. Might need “aquire” a few more operations as well.

    Time critical because as these sized entities make their moves the head of steam they get from existing merchants and the enormous global market exposure they enjoy will make it all completely moot. Its akin with “The Tucker” automobile sorta. It’ll be trying compete with Goliath’s but atop that cards stacked in favor of the Goliath’s.

    Work literally need begin yesterday or preferably turn on the time machine and turn the clock back 18 months.

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  27. We recently chose to do a plugin for Woo Commerce over some other major platforms, and this is great news for that decision. This really legitimizes Woo as THE go-to plugin for ecommerce with WP now. Seeing how WP powers an estimated >20% of the internet, this plugin is about to explode in the ecommerce scene. Magento should be very scared of this announcement for self hosted, and same goes for Shopify when Automatic undoubtedly opens Woo up to the WP.com hosted platform, too, if they haven’t already.

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  28. I definitely prefer Woocommerce to some of the other e-commerce platforms I have tried. I think it is awesome that it will be an integrated feature of WP in the near future.

    I have to wonder as other posters have…if Automattic acquired Woothemes as well, can we hope that the visual style of the core themes packaged with WordPress will evolve as well? I’d like to see the default theme packaged with demo content as well, more like a high quality ThemeForest theme or Squarespace. As a developer, I’ve stood by WordPress but I worry that more stylish platforms (Squarespace, etc.) will start to pull people away from the open source community that makes WordPress so awesome.

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  29. Makes me wonder if Matt made sure some of the funds got to the JigoShop team, as the WooCommerce code was stolen, sorry… forked, off of their code?

    Also makes me wonder if Matt’s staunch stance on GPL would change if someone ever forked WordPress and made it more successful than WordPress is and Matt’s money all went away?

    Of course, I don’t foresee either of these happening… but it does make one think a bit.

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  30. It seems like this acquisition means that the WooCommerce extensions marketplace is no longer open to new developers. I have an awesome plugin I want to sell on their marketplace but it seems to be impossible to figure out a way to sign the contract and send them the plugin code.

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