Buyer Profile: Wix
Each month we profile active buyers of SMB-focused startups. While we may know the buyers well, the information used in these posts only contain publicly available information.
This month, we are taking a look at Wix as an acquirer. Check out our previous buyer profiles for Yelp, Endurance International, Atlassian, Groupon, Deluxe, GoDaddy, Sage and Intuit.
Wix has only made 5 acquisitions to date. Therefore, we will conduct a more in-depth look at each other acquisitions.
DeviantArt — February 2017 — $36M USD
Wix acquired DeviantArt earlier this year, a month following the acquisition of flok. DeviantArt is the ultimate social network for artists and creatives to share their work, comment on other’s, and build a community. The company has over 40 million registered users, and supposedly had great user engagement rates.
The acquisition creates an opportunity for Wix to tap into that wide engaged network of artists, designers and photographers. Wix has also talked about helping them monetize through licensing and selling their art to other users of Wix.
DeviantArt raised a total of $13.5M USD in two rounds. The first was a Series A in 2007 from DivX for $3.5M. The following was a $10M corporate round from Autodesk. This goes to show that strategic investments from corporate investors does not necessarily close the opportunity of acquisition by an uninvolved third party.
Flok — January 2017 — Undisclosed Deal Price
Flok is a mobile marketing solution for local SMBs to build customer loyalty. Flok’s product offering includes loyalty cards, CRM, push messaging, and reward programs. Its offering was geared towards small medium businesses with a physical footprint.
Wix’s acquisition of flok is highly aligned with its stated investment preference of finding solutions that it can integrate into its suite of SMB tools. E-Commerce is a small but growing segment of Wix’s revenue — accounting for about 15% of its total customer base. This acquisition also signals that Wix might have higher aspirations than just being a website builder. Could the company be thinking of taking on Shopify and Square in the future with its own solution of offline offerings?
Flok was founded in 2011 and had raised a total of $12.2M USD in two rounds. Flok’s investors include General Catalyst Partners and Founder Collective.
This was Wix’s first acquisition outside of Israel.
Moment.me — April 2015 — $10M USD
Moment.me is a developer of mobile micro sites for events, that aggregates photos, videos and tweets from social networks and then organizes them into multimedia albums. The company also launched a social lead generation tool.
Ahead of the acquisition, Wix and Moment.me had been partners for a while, leveraging an integration to allow Wix customers to build micro sites on Moment.me. Following the acquisition, all the site building capabilities of Moment.me were absorbed into Wix, but the lead generation piece stood alone for quite a while before being shut down.
Moment.me raised a total of $3.2M USD in two rounds. The company was founded in 2011 and had investors including Titanium Investments and Blumberg Capital.
OpenRest— October 2014— Undisclosed Deal Price
Wix acquired OpenRest in October 2014. No purchase price was disclosed. OpenRest provided restaurants with services to enable online ordering, including web and mobile order management, interactive menu management, native mobile applications, analytics, push notifications and point-of-sales (POS) integration.
The acquisition allowed Wix to introduce vertical/industry specific solutions. Namely tools specific to restaurants in the case of OpenRest. OpenRest created a platform that allowed restaurants to add online ordering to their own websites, which enhanced the business’ online presence significantly.
OpenRest was founded in 2010 out of Tel Aviv, and had no institutional investor backing before being acquired by Wix.
Appixia — March 2014 — $10M USD
Appixia was the first acquisition for Wix. It was founded in 2012 in Israel, and was just a bit over a year old before being acquired for a tidy $10M USD. Appixia was a mobile first platform for building native mCommerce apps. It allowed retailers to bring their online stores into mobile, build a native app, and enhance the mobile engagement.
The companies saw great strategic alignment, as both are tools that allow non-tech people to be able to build online presence without code. The acquisition allowed Wix to boost its mobile functionality and support for new features such as push notifications, greater eCommerce solutions, and social integration.
Looking Forward…
It’s clear from Wix’s past acquisitions that the firm isn’t just buying businesses to shore up the number of websites that are built on it. Wix has been extremely strategic in acquiring companies that can integrate into the Wix ecosystem and create new verticals and specializations that the company did not previously have. Also, it should come as no surprise to see that most of their acquisitions were for mobile offerings. Increasingly, consumers are looking at SMB websites from the mobile device.
A potential acquiree for Wix should start working with the company early on to integrate with their existing system, and look at mutually beneficial ways to create tools that are value adding for Wix customers. From there, solutions that solve major digital problems for new verticals Wix is looking to grow will have a strong opportunity to get acquired and join the Wix family.
Wix is experiencing strong momentum. Over the past two years, their stock has gone from $20 — $75. The company now has a market cap of over $3.3B. We expect that their appetite and capacity for acquisitions will only increase as time goes on.
At SurePath Capital Partners we help startups raise the capital needed to become market leaders. When the time is right, we help our clients achieve profitable, deliberate exit strategies. We only work with startups in the SaaS, e-commerce and marketplace segments. Across those segments we have a deep focus on companies serving the global SMB market. Say hello:info@surepathcapital.com
