Industry Analyst & Strategist
TechCrunch gets into the nitty gritty of who and how much, Squarespace raises $300M at a staggering $10B valuation: “The online website creation and hosting service — which has now expanded into e-commerce by hosting online stores — then raised another $40 million round in 2014. But it is perhaps best known for its epic 2017-era $200 million secondary round that General Atlantic financed. That round was raised at a $1.7 billion post-money valuation. That means it has effectively upped its valuation by more than five times in just over three years.”
I think the single most important variable in this valuation is the ecommerce component. With ecommerce in the mix, we are looking at the big three proprietary SaaS platforms (Wix, Squarespace, and Shopify) sucking a lot of oxygen (investor cash) out of other solutions directed at entry level customers (site owners, freelancers, solopreneurs, micro-agencies). The other solutions I’m talking about are WordPress (open source), WordPress.com, and shared hosting.
The entry level customer is very much downmarket. It is typically the lower revenue, lower margin segment of the industry. To succeed in the downmarket niche, you need volume. The three PSPs (Proprietary SaaS Providers) are gunning for as much of the easy to use, limited scope, inexpensive market. The investments that they have all received are contingent upon increasing market share immensely; and of course locking in the customer, followed by upsells of anything and everything,
Is WordPress on the path to lose value in the downmarket or will hosting companies be the ones to develop SaaS solutions which have all the benefits of PSPs but live in the open source realm. We have WordPress.com which is really the only solution that I can think that goes head-to-head vs the PSPs. Elementor Cloud, now in beta, looks to be the next WordPress solution in this space. Will these two be enough to grab marketshare?