Small business payments company Square has announced the acquisition of startup Weebly, a drag-and-drop website builder with a focus on ecommerce, for $365 million in cash and stock, according to CNBC.
Founded in 2007, Weebly raised a total of $35.7 million, with Y Combinator, Sequoia Capital, and Tencent Holdings being among the most prominent investors in the company. And while the exit has likely left investors more than whole, the final acquisition price falls well short of Weebly’s 2015 valuation of $490 million, as last reported by Business Insider. While a website building company may seem out of Square’s wheelhouse, Weebly’s increased focus on making ecommerce simple for small business owners likely played a key role in justifying the deal.
Square already offers a functional ecommerce website builder; however, it’s likely that Weebly’s 625,000 paying customers, 60 percent of which are global according to Square’s press statement concerning the deal, proved to be an attractive shortcut to further owning the digital and physical presence of small business owners. Square’s CEO, Jack Dorsey, lends credence to this by stating in a press release that the acquisition would serve as a “bridge” between Square’s “in-person solutions” and Weebly’s “journey online.” (For those of you who are not in marketing, this bridge is also known by the buzzword “omnichannel commerce.”)
Of course, Weebly isn’t the only website builder. On the public front, both Wix and Shopify offer similar solutions. Both companies closed up from prior day’s trading by 2.14 percent and 3.43 percent, respectively Private website creation startups include Squarespace, which has raised a total of $278.5 million and was last valued at $1.7 billion, and Strikingly, which has raised a total of $27.8 million.
So while the Weebly acquisition gives Square a leg up on being the physical and digital hub for small business owners, there’s still a lot of room for more customers to be won over.
Illustration: Li-Anne Dias