WooCommerce’s Rumored Automattic Spinout Is Rattling the WordPress Commerce Ecosystem

Something is stirring inside Automattic’s Austin offices, and the whispers have grown loud enough that agency operators and plugin developers are starting to ask uncomfortable questions out loud. According to three sources familiar with internal discussions, Automattic CEO Matt Mullenweg has reportedly been in conversations with at least two private equity firms about spinning WooCommerce out as a separate, independently capitalized business unit — one that could operate with its own P&L, its own leadership team, and, crucially, its own fundraising runway.

None of this is confirmed. Automattic has not made any public announcement. A spokesperson did not respond to a request for comment by press time. But the chatter is specific enough — and has reached enough senior people in the ecosystem — that it would be irresponsible not to report it.

What Are Sources Actually Saying About the Alleged Spinout?

Sources close to the matter describe the conversations as “early-stage but serious,” with at least one term sheet reportedly floated by a growth-equity firm with a portfolio that includes other open-source-adjacent SaaS plays. The alleged thesis: WooCommerce, which powers an estimated 37% of all online stores globally according to BuiltWith data as of mid-2026, has never been monetized at anywhere near the level its install base would suggest. A standalone entity, the argument goes, could aggressively pursue a SaaS-style subscription model — think managed hosting bundles, premium extension tiers, and direct merchant support contracts — without being constrained by WordPress.com’s broader positioning.

“Automattic has always treated Woo like a loss leader for the WordPress ecosystem,” one agency principal who works extensively with WooCommerce merchants told Ecommerce Times, asking not to be named. “If someone writes a real check and says, ‘let’s actually monetize this thing,’ that changes the calculus for every plugin developer and hosting partner in the space.”

“The moment Woo starts acting like a SaaS company instead of an open-source project, the entire partner model breaks. Margins on extensions evaporate, and suddenly you’re competing against the platform itself.” — Senior partner at a top-20 WooCommerce agency, speaking on background

💡 Article Summary

Key Insights

1

What Are Sources Actually Saying About the Alleged Spinout?

2

Why Would Automattic Consider Separating WooCommerce Now?

3

How Is the WooCommerce Agency and Plugin Ecosystem Reacting?

4

What Would a Standalone WooCommerce Entity Actually Look Like?

5

Is This the Beginning of the End for WooCommerce’s Open-Source Identity?

Source: Ecommerce Times

Why Would Automattic Consider Separating WooCommerce Now?

The timing is not random. Automattic has faced an unusually turbulent 18 months. The public feud between Mullenweg and WP Engine that dominated late 2024 into 2025 created lasting reputational damage among enterprise WordPress buyers. WP Engine’s subsequent legal settlement — terms of which remain under NDA — reportedly involved significant financial concessions from Automattic. Meanwhile, Shopify’s continued dominance in the mid-market and BigCommerce’s aggressive push into B2B have put pressure on WooCommerce’s narrative as the “serious merchant” alternative.

Sources also point to a reported reorganization inside Automattic’s commerce division earlier this year. Paul Maiorana, who led WooCommerce through much of its growth phase, is no longer in a public-facing role at the company. LinkedIn activity from several senior Woo engineers shows departures to Shopify, Vercel, and at least one to a stealth commerce startup backed by Andreessen Horowitz. Automattic has not confirmed or commented on any personnel changes.

• WooCommerce reportedly generates less than 15% of Automattic’s total revenue despite driving the majority of its ecosystem traffic, per two sources with knowledge of internal financials.
• The extensions marketplace — once a high-margin business — has seen increasing competition from free alternatives and from Automattic’s own bundling of previously paid features.
• A reported internal audit in Q1 2026 allegedly flagged WooCommerce’s developer tooling as “18 to 24 months behind” Shopify’s app infrastructure.
• Hosting partners including Nexcess (now owned by Liquid Web) and SiteGround have allegedly been briefed on “potential structural changes” to their reseller agreements, though neither company confirmed this to Ecommerce Times.

How Is the WooCommerce Agency and Plugin Ecosystem Reacting?

The reaction inside the developer and agency community ranges from cautious to alarmed. For shops that have built seven-figure businesses on WooCommerce extension revenue — companies like YITH, which sells dozens of premium plugins, or SkyVerge, whose WooCommerce extensions were acquired by GoDaddy in 2021 — the prospect of a platform owner that suddenly has strong incentives to compete directly with the plugin layer is existential.

“Every Shopify partner has had to accept that Shopify will eventually build what you build, if it’s valuable enough,” said one founder of a mid-sized WooCommerce plugin business, who asked to remain anonymous. “WooCommerce has always been different because Automattic structurally couldn’t afford to alienate its developer base. A PE-backed spinout changes that overnight.”

“We’ve been through this movie before — it’s called what happened to the Shopify theme ecosystem in 2022 and 2023. Platforms consolidate. The question is how fast and how brutal.” — Chris Lema, longtime WordPress and WooCommerce consultant, in a comment posted to his private community Slack this week

Lema, for his part, told Ecommerce Times he had “heard enough from enough people” that he was actively advising agency clients to stress-test their WooCommerce dependency and document contingency plans for platform migration. He stopped short of confirming any firsthand knowledge of the spinout discussions.

What Would a Standalone WooCommerce Entity Actually Look Like?

Speculation inside the ecosystem has converged on a few plausible structures. The most discussed scenario has WooCommerce operating as a majority-owned subsidiary of Automattic with outside PE capital, similar to how Mailchimp operated before its 2021 Intuit acquisition — retaining open-source optics while aggressively commercializing enterprise and mid-market segments.

A second scenario, reportedly less favored internally but circulating among agency contacts, would see WooCommerce fully spun out with Automattic retaining a minority stake, giving the new entity full freedom to pivot toward a hosted, SaaS-native architecture — essentially rebuilding as a Shopify competitor with open-source DNA. That scenario would likely require a CEO hire from outside the WordPress world.

Names being floated in ecosystem Slack groups — entirely speculatively — include executives from Elastic, Contentful, and at least one former BigCommerce product leader. None of these individuals could be reached for comment, and Ecommerce Times has no evidence any of them have been approached.

• A hosted “WooCommerce Cloud” offering has allegedly been prototyped internally at least twice in the past four years but shelved due to conflict with hosting partners.
• Sources say the payment processing layer — where Woo Payments has quietly grown to processing an estimated $6B+ annualized GMV — is the most attractive asset for outside investors.
• Any PE-backed entity would likely push hard on WooCommerce’s B2B and wholesale segment, which remains underdeveloped relative to BigCommerce’s B2B Edition and Shopify’s B2B features launched in 2024 and 2025.

Is This the Beginning of the End for WooCommerce’s Open-Source Identity?

That is the question echoing across every WooCommerce-adjacent community forum and agency principal meeting right now. The open-source model has been WooCommerce’s defining advantage and its defining constraint simultaneously. It enabled a global developer ecosystem that no venture-backed platform could replicate organically. It also made monetization structurally difficult in ways that have allowed Shopify to run circles around it at the enterprise and mid-market level.

“Open source is a distribution strategy, not a business model,” noted one longtime commerce platform investor, speaking generally. “At some point, the people writing the checks want a business model.”

For the roughly 8,000 active plugin developers and 3,500 agencies that depend on WooCommerce as a primary revenue source — numbers cited by WooCommerce’s own ecosystem reports — the calculus is stark. A WooCommerce that acts more like Shopify is a WooCommerce that is less hospitable to the partner layer that made it dominant in the first place.

“Automattic built something genuinely remarkable with Woo. The question is whether they can monetize it without breaking the thing that made it valuable. That’s not a slam — it’s the hardest problem in open-source commerce.” — Lema, in a follow-up message to Ecommerce Times

For now, WooCommerce merchants and partners are in a holding pattern. The rumored conversations may amount to nothing — PE firms kick tires on assets constantly, and early-stage discussions collapse more often than they close. But the fact that senior agency principals are already auditing their platform exposure, and that at least one large WooCommerce hosting partner has quietly accelerated its Shopify migration practice, suggests the ecosystem is not waiting to find out. More reporting as this develops.