It might be called the little engine that could -- or maybe the little engine that does. Whatever you call it, Austin, Texas based WP Engine web hosting company just got a big payoff with a $250 million investment from the private equity giant Silver Lake partners.
While the money is the big news, the company also stands to gain from Silver Lake's expertise. Not only did Silver Lake help Michael Dell take Dell private, it's known for its investments with big tech companies such as Alibaba, Broadcom, GoDaddy, Symantec and more. Silver Lake managing partner, Greg Mondre, along with Silver Lake managing directors Lee Wittlinger and Mark Gillett, will take seats on WP Engine’s board of directors.
Not that the hosting company needs any help. It's annual recurring revenue from 75,000 customers currently sits at over $100 million, up 30 percent year-over-year.
"We are partnering with Silver Lake because of their incredible track record as technology investors, their understanding of digital platform businesses like ours and because of the alignment in core values we share," WP Engine's chairperson and CEO, Heather J. Brunner, said in a statement. "This partnership will help us further invest in our Digital Experience Platform and bring the power of our platform to WordPress users all around the globe."
WP Engine isn't a garden variety hosting company, but is a company that's found its own way to monetize open source software. Through its Digital Experience Platform, it specializes in managed hosting of websites running on the open source WordPress content management system, which according to W3Techs runs about 29 percent of the web -- a number that's up from 13 percent in 2010. According to its own research, WP Engine hosts more of the one million most trafficked WordPress websites than all other managed WordPress hosts combined.
It also has close ties with the CMS platform that is its bread and butter, as it counts Automattic, the company behind WordPress, as one of its investors. Other investors include GuidePost Growth Equity, Eric Ries and Silverton. After figuring-in Silver Lake's investment, the company has raised a total of about $290 million since it was founded in 2010.
The company has been on something of a roll recently in its efforts to expand its offerings to its target of enterprise companies looking for a secure and reliable avenue for harnessing the easy-to-update WordPress platform. In November it became the first WordPress solution be certified in Amazon Web Service's Competancy Program for the category of Marketing & Commerce. The company is also a Google Cloud Platform Technology partner.
"WP Engine’s enterprise-grade technology and excellent service enable its customers to rapidly create high quality websites with best-in-class performance," said Silver Lake's Wittlinger in a statement. "We believe WP Engine is poised to take a leading global position in the fast-growing WordPress ecosystem and we look forward to working alongside the company’s talented management team as it executes on its next phase of development."
Although the company said the money invested by Silver Lake will be used to fuel growth, it declined to offer any numbers to indicate by how much. Currently WP Engine employs about 500 people.