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Automattic nears Tumblr valuation

May 24, 2013: 11:26 AM ET

automattic-screenshotWordPress.com parent company raises $50 million.

FORTUNE -- WordPress.com parent company Automattic today announced a $50 million investment from Tiger Global, in a secondary deal that will provide liquidity to early company shareholders.

The San Francisco-based company declined to discuss valuation, but a source familiar with the situation says that Tiger valued Automattic "just below" the $1.1 billion price-tag that Yahoo (YHOO) recently bestowed upon Tumblr.

You may recall earlier this week that Automattic founder and CEO Matt Mullenweg noted how WordPress "imports" from Tumblr had spiked on rumors of the deal (although he later added that he wasn't expecting a full-fledged Tumblr "exodus"). It is worth noting, however, that Automattic primarily focuses on VIP hosting and other enterprise-level services for companies using the WordPress platform, which itself remains free to use and open-source.

Automattic last raised outside capital five years ago, in a $29.5 million round that included Polaris Partners, Radar Partners, True Ventures and The New York Times Co. (NYT). That deal also included some secondary liquidity, although most of the money was used for working capital.

In a blog post about the Tiger Global deal, Mullenweg wrote that "the minority of stockholders that elected to participate are holding on to the vast majority of their shares."

Lee Fixel of Tiger Global did not respond to a request for comment.

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Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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