Hillhouse invest $250M into Magento to grow ecommerce platform
Massive news regarding Magento this week: leading investment management firm Hillhouse Capital have invested $250 million (approximately £206 million) into Magento ecommerce. Fantastic news for the future of the company, this investment shall fuel Magento’s innovation in the field, strategy for growth, expansion for sales, marketing & client support and help with the need for further recruitment to come. According to the Financial Times, this will bring the market value of Magento up to $700 million.
Magento is an ecommerce web development tool that is used by product sellers of any stature for both B2C and B2B industries alike. Notable clients include: Coca Cola, Burger King and Nestle. The company is able to boast over 250,000 clients using their service, with a massive $50 billion in sales enabled through their software every year.
Launched in 2008 by California based company Varian, Magento was soon acquired by Ebay in 2011 for a sum of $150 million. In 2015, Ebay conducted a strategic realignment and sold off many of their assets, including Magento, who were consequently bought by a consortium that included Permira Funds, who still possess the majority ownership to this day.
Hillhouse Capital, who were founded in 2005, are an investment management firm based in Beijing who currently manage over $20 million worth of assets. The Chairman of Hillhouse, Zhang Lei, had the foresight to become an early investor in the now-huge Chinese internet company Tencent, which has grown into China’s most used internet service portal. Through this investment, Hillhouse will take two seats on the board at Magento and will adopt an advisory role within the company.
Mark Lavelle, CEO at Magento commerce, is delighted with this investment and has vowed to set up new offices in the Asia Pacific region as a result, stating that the “Asia Pacific is an extremely high-growth region . . . this will help us invest wisely in our global expansion.” He also added that “In addition to the capital that will accelerate our growth, this investment brings the experience and long-term perspective of another marquee investor. Both Hillhouse and Permira see that in nearly every industry, there is a major secular acceleration taking place driving demand for digital commerce technology. Yet clients have few options when 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.”
Phil Guinard, a partner at Permira, said “The Permira funds look forward to partnering with Hillhouse to continue supporting the Magento management team as the company builds on its industry-leading brand position and executes its global growth strategy.”
Here at Yoma, we are experts in Magento Ecommerce so this is exciting news for all of us. We cannot wait to see what’s in store for the future, as with this big news announcement, Magento’s certainly looks bright.