Last week, Magento was successful in securing a significant sum (£206 million) from Hillhouse Capital – a leading investment management firm founded by Zhang Lei in 2005 – as part of its quest to further grow, with worldwide expansion of sales, marketing and client support, new product innovation and future acquisitions, all in the platform’s sights.
Following the news that Magento has acquired the new funding, it has now brought Magento’s market valuation to £577 million, unnamed sources at the Financial Times have stated.
Brief Insight Into Magento
For anyone not up to speed, Magento is the company that offers online businesses with an open source eCommerce software platform that merchants and brands alike, both B2C and B2B, can use to promote and sell via eCommerce.
It was formed in 2001 and was originally named Varien. Varien published the first general-availability release of the Magento eCommerce channel some nine years ago, in 2008, and eventually went on to rebrand under the Magento name two years later on, in 2010.
Just one year after, eBay got in on the act and successfully acquired Magento in 2011. They owned the platform for four years until they sold it as part of their strategic realignment in 2015. A consortium of private equity investors, such as Sterling Partners and Permira Funds were involved in the takeover.
Who Is Hillhouse Capital?
The Beijing-based Hillhouse company currently manages in excess of £16.5 billion in assets. Zhang Lei, who is the chairman of the company, was one of the early investors in the Chinese internet giant Tencent.
As Lei looks to further their options, Hillhouse is branching out to partner with representatives from both Magento and Permira, both of which are set to continue to own a majority stake in the company.
Mark Lavelle, CEO of Magento Commerce, recently said in a statement that Magento is an option for clients who are looking for a company “whose sole focus is on digitising the customer experience across all channels where commercial transactions occur.”
Lavelle went on to say: “Magento’s goal is to be the leading company for the next generation of commerce innovators, and it is a privilege to have two prominent technology investors backing our vision.”
More On Magento
At this stage, Magento has established itself to help power platforms for as many as 250,000 websites across the globe. Notable customers for the eCommerce platform provider include Coca-Cola, Burger King, Nestle and Ikea. It should come as little surprise that Hillhouse was so keen to invest in Magento, especially when it has such global powerhouses on their books. It has also been stated that Magento has helped to power £41 billion in annual transactions!
Towards the end of 2016, in November, Magento did what they consider to be some more clever business, announcing that it has partnered with Acquia, a software-as-a-service company providing enterprise products, services, and technical support for open-source web content management. The team at Magento sought this move to allow for the integration of Acquia’s digital experience portfolio with their own commerce and fulfilment services.
This was seen as a shrewd move by the Magento team, as the integration of open source content and commerce solutions assist in overcoming one of the biggest issues for eCommerce platforms, notably effectual content management for retail sites using the service.
What Next For Magento?
The future is looking bright for Magento, and the new partnership means that the platform can now integrate the Drupal web content management system and Acquia Lift solutions. This essentially means that its users will have access to a much-improved personalisation suite that works in unison with Magento’s commerce and order management services, allowing for a more unified level of content, commerce for their customers across the board.
Following the significant investment of capital from the Chinese company, Magento will now look to further its presence within the Asia Pacific region, with Zhang Lei, saying: “We see tremendous growth opportunities for Magento globally and specifically in Asia.”
Not a bad way to start the New Year for all concerned, we’d say!