What is the WordPress v WP Engine Drama Really About?
Money. Well that and ego. Isn’t it always?
In the David vs. Goliath tale that Matt Mullenweg is spinning in his battle against WP Engine, one of his major criticisms is that WP Engine is backed by the private equity firm Silver Lake, which manages over $102 billion in assets. During his fiery keynote at WCUS, Mullenweg stated, “Silver Lake doesn’t give a dang about your open-source ideals; it just wants a return on capital.” Silver Lake’s control of WP Engine dates back to 2018.
However, Mullenweg is not exactly the David in this scenario. I don’t buy this being about protecting open source from private equity or WP Engine; if it were, it would have been handled differently.
What Mullenweg has not discussed recently is that his for-profit company, Automattic, has been backed by BlackRock since 2021. BlackRock manages over $9 trillion in assets.
In the lead-up to Matt’s WCUS attack on WP Engine, a post dated September 20, 2024 titled “Are Investors Bad?” fails to mention The BlackRock investment. Instead, he lists other investors, including True Ventures, Addition, Tiger Global, Salesforce, GIC, ICONIQ, LVMH/Aglaé, Akkadian, Wellington, Sweetwater, Alta Park, Schonfield, and Chris Sacca.
Matt seemed eager to share the news of the BlackRock investment in Automattic back in August of 2021, six months after the $288M investment round closed. He also stated “We’ve grown and increased our valuation at a rate higher than most other alternate investments available to investors.” What about since then?
Matt’s investment in WP Engine
WP Engine built their entire platform around WordPress. In 2011 when WP Engine was generating ~$1M in annual revenue with approximately 30k customers, Automattic invested in WP Engine. The $1.2M round was led by Silverton Partners and closed in November.
Mid 2011 (perhaps around the time that fundraising round was being negotiated?) the very permissive WordPress Foundation Trademark Usage Policy was updated to include:
We do not allow the use of the trademark in advertising, including AdSense/AdWords.
The policy has gotten a lot longer but is still permissive:
Similarly, it’s OK to use the WordPress or WordCamp logo as part of a page that describes your products or services, but it is not OK to use it as part of your company or product logo or branding itself. Under no circumstances is it permitted to use WordPress or WordCamp as part of a domain name or top-level domain name.
Automattic maintained its investment until Silver Lake acquired control of WP Engine in 2018. Was Automattic forced out of its investment? Is Matt just bitter that he’s no longer benefiting from their growth?
Head to head growth of Automattic & WP Engine since
2020 was a hellscape of uncertainty all over the world thanks to the pandemic. One sector that thrived? Anything related to creating and expanding an online presence. This was a prime time for securing additional investment.
In February 2021, Automattic closed that $288 million investment round, bringing BlackRock into the picture and increasing Automattic’s valuation to $7.5 billion.
While Automattic has a diverse portfolio of revenue sources (WooCommerce, VIP, domains, .Blog, etc. fueling growth), WP Engine maintains a singular focus: selling WordPress hosting.
Since 2021, WP Engine has evidently quadrupled its revenue. By contrast, Automattic, including all its business units, may not have even doubled its revenue during the same period.
Given this context, one might wonder if Matt’s recent trademark scrutiny is an attempt to bolster earnings under pressure from investors or creditors. What kind of growth promises were made, and to whom?
Is Mullenweg trying to rewrite history and alter how WordPress is licensed now that other companies are more successful with his creation than he is?
Love him or hate him DHH has an excellent read with more detail on the open source aspect.