WooCommerce: free-plugin bet powered ~30% of online stores, sold to Automattic

The South African company behind WooCommerce, the free WordPress e-commerce plugin, plus commercial themes and extensions bought by the plugin's stores.

That a free, open-source e-commerce plugin could become the default way stores sell online, monetized by themes and extensions — with no venture capital.

WooThemes was founded in 2008 by Mark Forrester, Adii Pienaar and Magnus Jepson — as Forrester put it, three strangers in three countries — to sell premium WordPress themes. The company built one of the early businesses in commercial WordPress theming before its flagship product pulled it into self-hosted e-commerce.

WooThemes launched WooCommerce as a free plugin that turned WordPress sites into stores, then sold themes, extensions and services to the growing install base. By April 2015 co-founder Magnus Jepson said WooCommerce accounted for more than 85% of overall sales and processed several million dollars a year, with monthly revenue records being broken regularly. The plugin passed seven million downloads, BuiltWith data showed it powering roughly 30% of all online stores, and the bootstrapped company employed about 55 people spread across multiple countries.

On 18 May 2015 Automattic, the company behind WordPress.com, announced it had acquired WooThemes — its largest acquisition to date, by about 6x, with Re/code reporting the price at more than $30M in cash and stock. WooCommerce and WooThemes kept their own brands and websites under Automattic.

Free WooCommerce rode WordPress's own distribution: every WordPress site was a potential store, and the plugin spread with no sales team.

The open-source license removed the fear that locked buyers out, letting agencies and developers build a whole ecosystem on top of WooCommerce.

Extensions and themes monetized the install base, so the company stayed profitable and independent for seven years without venture capital.

Automattic paid for the adoption and ecosystem — a 'several million dollars a year' product was worth more than $30M to a strategic buyer that wanted to own commerce on WordPress.

Giving away the core under an open license built distribution paid rivals could not match; the money was in the ecosystem, and bootstrapped founders could exit to a strategic buyer.

As of 28 May 2015, WooThemes is part of Automattic: the 55-person team joined the company, and Automattic said WooCommerce and WooThemes would keep their brands, websites and existing partnerships, with WooCommerce offered to WordPress.com customers long-term. Mullenweg framed the deal as a step toward an open, independent commerce platform, and the next WooConf was still scheduled for Austin that November.