Rumblings Surround WooCommerce’s Potential Spinout from Automattic
In the realm of managed WordPress hosting, an intriguing consensus among industry leaders surfaces: “Our most lucrative clients tend to be merchants.”
This perspective has prompted considerable attention among hosting executives, particularly in light of emerging speculation surrounding a prominent plugin.
On September 9, Online Store News revealed that dialogue is underway between at least two private equity firms and Automattic regarding the potential partial or full divestiture of WooCommerce.
Sources close to the negotiations—a mix of agency executives and a former product lead at Automattic—emphasize that these discussions remain tentative and exploratory at this stage.
While Automattic has yet to officially acknowledge these developments, the narrative of WooCommerce’s possible separation has gained traction in trade publications since early August. This marks a significant shift; reports now suggest that the meetings are indeed taking place.
For merchants, customers can continue to operate their stores without concern, as the plugin remains GPL-licensed. However, the implications for hosting providers are more significant.
WooCommerce has evolved beyond a mere plugin; it has transformed into a robust marketplace for extensions, payment solutions, and various tiers of managed hosting available on WooCommerce.com, all while maintaining a free download option.
Online Store News reports that in 2025, WooPayments alone facilitated over $12 billion in gross merchandise volume (GMV), a statistic that underscores the platform’s lucrative nature.
Moreover, its extension marketplace boasts margins that significantly exceed the average across Automattic’s entire portfolio—a financial incentive that would certainly appeal to potential investors, as opposed to merely acquiring a GitHub repository.
As outlined by an agency principal in a discussion with Ecommerce Times this past August, Automattic has historically regarded WooCommerce as a loss leader within the WordPress ecosystem.
If a serious investor steps in with a genuine offer, it would fundamentally alter the dynamics for every plugin developer and hosting partner involved.
The mention of “hosting partner” is particularly salient. Many providers, such as Nexcess and SiteGround, market their offerings through a dedicated SKU named Managed WooCommerce.
The crux of this SKU is to alleviate the substantial workload associated with running a store that could otherwise be established for free.
According to sources consulted by Online Store News on September 1, Vista Equity Partners stands out as a firm reportedly engaged in preliminary discussions with Automattic.
Additionally, Newfold Digital—owner of Bluehost and Web.com—has been cited as a potential strategic buyer, given its extensive involvement in the WordPress hosting sector.
The prospect of a Newfold-controlled WooCommerce raises pertinent questions for competitors like SiteGround, Hostinger, and Kinsta, particularly those vying against Bluehost in the managed WooCommerce arena.
An acquisition would effectively transfer ownership of the eCommerce product to a direct competitor. Online Store News posits that this scenario could engender perceived conflicts for merchants utilizing competing WordPress hosts.
Moreover, WP Engine’s interest cannot be overlooked. Sources suggest that at least two entities are measuring the feasibility of a “commercial partnership” with WooCommerce.
An agency owner remarked to an outlet that the amalgamation of WP Engine’s infrastructure with a standalone version of WooCommerce “appears quite reasonable when analyzed closely.”
However, such an integration would require considerable scrutiny.
Contrary to reports, the litigation involving WP Engine remains unresolved—as noted by its litigation page, where the company confirms that a motion for sanctions was filed on July 28, indicating that the case is ongoing.
Notably, WooCommerce, Inc. is a counterclaimant in this legal battle. Regardless of how sources portray the situation, the court proceedings between the two entities continue unabated.
The irony is palpable: just two years prior, Mullenweg publicly expressed concerns regarding WP Engine, criticizing its private equity ownership as detrimental to the open-source initiative. Should WooCommerce transition into a private equity portfolio, such statements may resurface to haunt him.
As of September 4, a recent analysis from StoreLeads shows 4,047,205 active WooCommerce stores, reflecting a decrease from 4,776,386 in the second quarter of 2024—a decline of roughly 15% over a two-year span. The total count has also fallen by 8% year-over-year since Q2 2026.
Live WooCommerce Stores by Quarter
Analyzing the churn within the last 90 days, it is notable that 8,538 stores transitioned from WooCommerce to Shopify, whereas only 5,427 moved from Shopify to WooCommerce.
When aggregating data across all platforms, WooCommerce experienced a net decline of approximately 5,500 merchants, having lost 21,797 while gaining 16,310—an erosion that occurred prior to any announcements regarding private equity engagement.
According to findings in its September 1 report, Online Store News indicates that much of this churn arises from businesses generating revenue in the $2 million to $20 million range—historically WooCommerce’s core demographic.
These clients typically rely on dedicated hosting plans, which include substantial object caching and extensive support. Such segments are precisely the type that Shopify Plus seeks to attract.
On a positive note, the open-source foundation of WooCommerce remains intact under the GPL. Consequently, any acquisition would ensure that the code and licensing provisions remain accessible, allowing stores to remain operational post-announcement.
However, it is imperative to consider the trajectory of the Magento saga, which presents a compelling parallel within the industry concerning platforms absorbed into private equity. In 2015, eBay divested Magento to Permira, which subsequently sold it to Adobe three years later.
Over time, the open-source variant experienced relegation in priority, prompting the community to fork it. Hosting providers familiar with Magento dedicated significant resources over the past decade to migrate clients away from the platform.
Throughout this ordeal, the code remained available for free, yet the commercial operations faced significant upheaval.
Of utmost concern for hosting providers, a transition involving WooCommerce could result in substantial changes to the commercial framework: this includes the licensing terms governing extensions, the economic viability of leveraging WooPayments as a processor, and possibly elevating the hosting tier on WooCommerce.com from a secondary feature to a primary focus.
Each of these elements sits at the intersection of hosting services and eCommerce clients, serving as potential leverage points for a private equity owner aiming to enhance value.
In a statement to Online Store News, an Automattic representative remarked that the company “does not engage in commentary regarding internal strategic discussions” while categorically labeling WooCommerce as “a cornerstone of Automattic’s commitment to democratizing publishing and commerce.” Mullenweg has not provided commentary to either news outlet.
For hosting providers, however, the forthcoming signal may very well manifest through an invitation to a partner summit scheduled for late Q4, featuring an unusually high representation of executives.
Source link: Hostingadvice.com.
