The archive · Commerce & Marketplaces · Product decision · 2008–2015
WooCommerce: free-plugin bet powered ~30% of online stores, sold to Automattic
WooThemes gave away an e-commerce plugin, sold themes and extensions around it, and grew it to millions of downloads before Automattic's 2015 buyout.
WooThemes (WooCommerce)
What the business is
The South African company behind WooCommerce, the free WordPress e-commerce plugin, plus commercial themes and extensions bought by the plugin's stores.
How it started
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.
What happened
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.
How it ended up
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.
Background
WooThemes started in 2008 as a premium WordPress theme shop run by Mark Forrester, Adii Pienaar and Magnus Jepson, who lived in different countries and had never met when they began. The company's bet was that the open WordPress ecosystem would pay for good commercial themes — and then that a free e-commerce plugin, WooCommerce, could become the standard way WordPress sites sell things.
WooCommerce was given away under the same open-source license as WordPress, and WooThemes made money from themes, extensions, support and services around the plugin's fast-growing install base. By April 2015 co-founder Magnus Jepson told WP Tavern that WooCommerce represented over 85% of sales and processed several million dollars a year, with monthly revenue records being broken; the plugin had passed seven million downloads and BuiltWith data showed it on roughly 30% of online stores.
On 18 May 2015 Automattic, the WordPress.com parent, announced it had bought the bootstrapped company — by far its largest acquisition to date. Re/code reported the price at more than $30M in cash and stock, and Forrester later called that figure a good ballpark. WooCommerce kept its brand, its 55-person team joined Automattic, and Automattic gained the dominant open e-commerce platform on the web.
What has to be true
- 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.
What can be applied
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.
Aftermath
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.
Sources
- Automattic Acquires WooCommerce
- Smart buy: Automattic picks up WordPress e-comm plugin maker WooCommerce for $30m+
- WooThemes' Mark Forrester on how an SA startup sprouted a global success story
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