April 6, 2008

Thoughts on the Polopoly sale

Atex acquired Polopoly, a Swedish web-content management system, for 140 MSEK (about $23.5 million) this week (Swedish article).

For web entrepreneurs the sale has some takeaways.

- It is worth noting that Polopoly, like its Swedish competitor Episerver, is not a product that is generally loved by its users nor have massive cred in the tech community.

- Strategic investors/partners (like Bonnier and its newspapers in Polopoly's case) can be a good thing to drive adoption.

- Raising too much from venture capitalists will severely limit your exit opportunities. The founders Henrik Holmström and Gustaf Sahlman apparently made about $6 million and $3 million respectively (pre-tax, I assume). For a local, non-smash hit company that is good outcome. If you raise $10-20 million dollars (or in the case of WordPress $29.5 million), you cannot really exit below the $100-150 million level (and I guess the investors wouldn't be to happy at that level).

1 comment:

edenstrom.wordpress.com said...

History has proved that it isn’t that hard to switch from EPiServer, Polopoly, Escenic, RedDot to another CMS. Despite what the CMS-manufacturers might want the investors to believe. It’s costly, but so are also other client specific changes within the CMS. CMS-switches occur all the time.

A great client list, which EPiServer and Polopoly truly have, is valuable, but doesn’t guarantee anything for the future. I believe the CMS-product itself still is the essence when marketing- and IT-managers look upon their future publishing platform.