Last week, Tiger Global led a $50 million round of investment in Matt Mullenweg’s seven-year-old digital publishing company, Automattic.
Automattic is the parent company of WordPress.com, which lets individuals and even companies such as TechCrunch create and host blogs. It also makes publishing products like spam blocker Akisment and Jetpack.
Fortune’s Dan Primack says last week’s deal makes Automattic worth almost as much as sky-high Tumblr. Automattic’s valuation is “just below” Tumblr’s $1.1 billion, says Primack. A spokesperson for the company declined to confirm Automattic’s $1 billion valuation.
The $50 million was a secondary transaction. In other words, rather than taking cash, existing shareholders such as early employees and investors sold stock to outside investors. It’s the company’s first fundraise in five years.
“Automattic is healthy, generating cash, and already growing as fast as it can so there’s no need for the company to raise money directly — we’re not capital constrained,” Mullenweg wrote on Friday. “The minority of stockholders that elected to participate are holding on to the vast majority of their shares. We’re building an independent company that’s going to be a growing part of the fabric of the web for many years to come, so allowing early investors to lock in some returns releases any short-term pressure there might be on the company for a liquidity event and allows us to focus fully on the long road ahead.”