WPEngine gets another cash infusion

Thu, 6th February 2014, 19:59

Another day, another multimillion dollar injection from private equity directly into the veins of the hosting industry. The latest lucky recipient of the partnership is WP Engine, the CMS giant whose growth has been courting the investors for a long time now. They struck a bargain with North Bridge Growth Equity, a VC firm noted for its high-tech open-source designs, to the tune of $15 million and a spot on WP Engine’s board. The goal of all the new financing? Massive growth with international themes, coming on the heels of WP Engine’s plan to expand into Europe next year.

Allons-y, we guess! Hey, at least they aren’t gobbling up startups like everyone else.

It’s fascinating to get into the nuts and bolts of the deal- specifically its history, the growth that brought all the financial suitors running in the first place. Speaking to TechCrunch, WP Engine CEO Heather Brunner confirmed the company’s 25% quarterly growth since year one, and with expansion like that (dating back to 2010) one has to wonder just what extrapolating all this success means for the company. More success? If they’re lucky.

Heather Brunner in a statement to HJ said: 

“We’re very excited about our partnership with North Bridge Growth Equity. Given their extensive background in open source we knew they were the best fit to help us build on our rapid growth in the market. As our customers depend on us to bring their content to the world, we’re eager to continue providing them with digital ease, assurance and confidence.  The funding comes at a time of explosive growth for WordPress, which is now the most popular content management system on the internet.” 

It is and always has been easy to get caught up in rapidity of growth. To analyze that we’d have to make some utterly laborious points about capitalism, spare us all, so instead let’s focus on the concept of the business- in this case a WordPress hosting provider as the vehicle, and all this rampant growth as the motion of the thing. Maybe this is all reductive, but just how fast can the engine run?

WP Engine’s success is a credit to its core elements, its team and its leadership. Its clockwork 25% quarterly growth is a testament to the expansion of the CMS, the digitization of publishing, the continued dawning of the era of social media and the primacy of WordPress. What it will do with fifteen million incentives to expand its grasp is another question entirely.

There’s no end to the loaded phrases that come with the discussion of rapid internet expansion, and we won’t indulge those notions here, but it’s an inescapable fact that there is a level of growth that’s healthy, and a level where historically less so. 

Back in 2012, upon discontinuing their marketing program, industry veteran ICDSoft posted an extremely thoughtful blog post on this very subject.

“We believe that each business has a ‘critical mass’ - a certain size of the company, beyond which it becomes difficult to maintain the same level of service. More customers and employees leads to the requirement for more complicated company structures and procedures, and it is usually the customer who suffers because of the scale of the provider.”

Usually the customer who suffers. And there’s going to be 25% more of those customers at the end of this quarter, don’t you imagine? Of course, there’s always the complete possibility that the market will continue to grow and that all these new structures will be supported with the same level of care that got WP Engine into this position to begin with.

There’s also the opportunity that in 2 years they’ll be primed to sell to a bigger fish. Anything could happen, after all. (Editor's note: HostJury is hopeful for our own interview with WP Engine's Heather Brunner).

Thoughts? Clients of WP Engine can share their experiences here. 

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