What does WP Engine’s $250 million funding round from Silver Lake mean for the Austin Startup Scene?
Yesterday WP Engine announced they had reached $100 million in annual recurring revenue (ARR) and received a $250 million investment from Silver Lake, the premier technology private equity firm that also took Dell Technologies private. The last company to raise that kind of funding was HomeAway 10 years ago in 2008 — which ended up doing an IPO and then selling to Expedia for $4 billion. This is a landmark event that will affect the funding stats for Austin and for Texas for years to come.
This is a huge win for Jason Cohen and Heather Brunner, the management team, and many of the early employees. Not just financially — think of the incredible experience they have gained and what they still have ahead of them to learn. They are teaching hundreds of people in Austin how to scale a high-growth company — and they are doing it with a strong culture that is their secret sauce.
This is a huge win for the Austin angel investors who bet early on Jason. Most angel investors define a 10x return as a home run. That means this one was hit out of the park. A portion of this funding was a secondary offering that bought out the original angel investors and a lot of that money will go right back into new startups in Austin.
This is a huge win for Capital Factory. WP Engine helped us evolve from a 12 week bootcamp into a continuous program. WP Engine was the first company to beta test coworking on the 8th floor of the Austin Centre building alongside OtherInbox and Datran Media (now Return Path and PostUp, respectively). All of the things we did to help WP Engine ended up becoming part of the Capital Factory Accelerator program that has now worked with more than 250 startups.
Capital Factory helped recruit the initial team of employees and the first angel investors. Mentors like Bill Boebel, Jeremy Bencken and Michael Trafton made a big impact on the early business model and culture. I introduced Kip McClanahan and Jason Cohen which led to Silverton Partners leading their Seed and Series A investment rounds. Then we helped them recruit employees as they rapidly scaled by tapping into all of the meetups and events happening at Capital Factory every day.
This is a huge win for Silverton Partners and especially Kip McClanahan. This is the kind of investment that returns the whole fund and then some. This is probably the biggest feather in his hat— and it was already looking pretty darn good with companies like SpareFoot and TrendKite and many others still maturing.
This is a huge win for the City of Austin, Austin City Council and Mayor Steve Adler. They should celebrate this win and hold them up as an example and role model for others. WP Engine is not just financially successful, they have an incredible culture of inclusion and individual empowerment that provides entry level jobs with incredible opportunities for advancement.
This is a huge win for the State of Texas and Governor Greg Abbott. As he encourages companies from the east and west coast to move to Texas — something he’s already pretty good at — this will be an important example to point to about the type of startup businesses that can get funded and scale here in Texas and then expand globally.
This is a huge win for diversity and female CEOs and executives who execute to deliver consistent, outstanding business results while creating a nationally recognized best place to work.
- 55% of the exec management team are women
- 30% of the organization are women
- 30% non-white employees across the business
- 33% of employees do not have a college degree
- 25% of the employees were promoted in 2017
- 5% self identify as LGBTQ
This will change the funding stats reported in Austin and Texas for years to come. Just like Magic Leap has an outsized impact on Miami, WP Engine will have an outsized impact on Austin and Texas when organizations like Forbes and Kauffman Eship rank different cities.
Do you know who the next WP Engine in Austin will be? Maybe we should look to the north to RewardStyle in Dallas. Or maybe it will come from Houston? I want to meet them.
