WP Engine Gets $250M From Silver Lake as PE’s Hunger For Tech Grows
Austin—WP Engine, a seven-year-old company that hosts and manages WordPress websites for businesses, is taking a $250 million investment from private equity giant Silver Lake Partners.
WP Engine says it helps some 75,000 businesses around the world build and operate their websites on WordPress, working with customers on anything from technical issues when building pages to spikes in page views, to the website’s security. The company says it plans to use the funding for further international growth, as well as work on its products.
WP Engine has grown rapidly since it launched in 2010 with a couple dozen customers, and now has offices in six cities globally. The company says it now has more than $100 million in annual recurring revenue. At the same time, WordPress has taken a greater hold on the Internet, representing about 29 percent of websites currently, up from 13 percent in 2010, according to WP Engine.
Numerous other companies offer WordPress hosting or similar website services, from Flywheel to SiteGround to GoDaddy. A WP Engine spokeswoman says the company considers Adobe and European software company Sitecore as more direct competitors.
Silver Lake’s quarter-billion-dollar investment comes along with a flurry of activity in private equity deals in the technology sector, including a few in central Texas. San Antonio-based cloud computing company Rackspace was sold to funds associated with Apollo Global Management in 2016 for $4.3 billion. More recently, Lost Angeles private equity firm Marlin Equity Partners bought Austin-based Bazaarvoice in November in a deal valued at more than $500 million. Minneapolis-based Apple device manager Jamf was acquired by Austin-based Vista Equity Partners in October. Lexington, MA-based Imprivata sold to Thoma Bravo for $544 million in 2016.
One cause of the activity could be that private equity firms have more cash at their disposal than they have in more than a decade, as Xconomy reported in August. Seattle-based PitchBook said at the time it expected more mergers and acquisitions to happen because private equity firms in North American and Europe had about $738.7 billion to invest.