Magento Commerce this week gave new meaning to a “large round of funding,” scoring $250 million from Hillhouse Capital for growth, worldwide expansion of sales, marketing and client support, new product innovation and future acquisitions.
The investment brings Magento’s market valuation to $700 million, according unnamed sources cited in the Financial Times.
Open Source Ecommerce
Magento is an open source ecommerce software platform for merchants and brands in both B2C and B2B industries. It was created in 2001 by Culver City, Calif.-based Varien, which published the first general-availability release of the Magento platform in 2008 and then rebranded under the Magento name in 2010.
EBay acquired Magento in 2011 and then sold it in a strategic realignment in 2015 to a consortium of private equity investors including Permira Funds and Sterling Partners. London-based Permira subsequently spun out assets it attained in the acquisition into Magento Commerce, an independent company centered around the Magento platform.
Beijing-based Hillhouse, founded in 2005, manages more than $20 billion in assets. Its chairman Zhang Lei was an early investor in the Chinese internet giant Tencent.
Hillhouse is stepping in to partner with representatives from Magento and Permira, which will continue to own a majority stake in the company. In a statement, Mark Lavelle, CEO of Magento Commerce, said Magento is an option for clients who are looking for a company “whose sole focus is on digitizing the customer experience across all channels where commercial transactions occur.”
“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,” he stated.
Magento said its ecommerce platform powers 250,000 websites worldwide for customers including Nestle, Coca-Cola, Burger King and Ikea. It also claims to have powered $50 billion in annual transactions.
In November, it partnered with Boston, Mass.-based Acquia to integrate Acquia’s digital experience portfolio with Magento’s commerce and fulfillment solutions.
The integration of open source content and commerce solutions tackles one of the biggest problems for ecommerce platforms, notably effective content management for retail sites.
In practical terms the partnership means that Magento will integrate the Drupal web content management system and Acquia Lift solutions for personalization with Magento’s commerce and order management products to unify content, commerce and context across the customer journey.
With the large investment of capital from the Chinese company, Magento is poised to grow in the Asia Pacific region. “We see tremendous growth opportunities for Magento globally and specifically in Asia,” Zhang Lei, Hillhouse Chairman and CEO, said in a statement.