Squarespace raises $40M, which is as much as it plans to spend on ads this year
New York-based web design and hosting service Squarespace today announced that it has raised a $40 million Series B funding round from General Atlantic to grow its design, engineering, and infrastructure teams. That brings its total funding to around $78.5 million. The company says that it currently employs 285 people tasked with serving “hundreds of thousands” of users.
The announcement follows a marketing push the company started earlier this year when it advertised its website-creation service during the Super Bowl broadcast. Squarespace CEO Anthony Casalena then told Pando’s James Robinson that the company plans to spend $40 million on advertising in 2014 alone. As James concluded at the time:
Squarespace has a customer base that is tens of thousands strong. Casalena wants the company to crossover, to start standing on the platform it has built itself. It has won accolades with its ease of use and its product is good enough to go against Go Daddy and be a major player in the consumer website space, but mainstream recognition and success can’t be bought.
The top-dollar advertising push is multi-million dollar risk. It is a big part of a riddle that the company is trying to solve. Squarespace won’t become the mainstream success Casalena desires on marketing alone, but you can have the best product in the world and it’s nothing if people don’t know who you are.
‘Marketing shouldn’t be the top priority,’ Casalena says. ‘But it is important.’
Now it seems that Squarespace will refocus on developing its service. The company has been hard at work over the last few years to become something more than a simple blog creator: it has debuted apps meant to help artists display their work; services to help store owners sell their goods; and an update meant to make it easier for anyone to create a decent website.
The renewed focus on marketing and product development highlight Squarespace’s upcoming challenges. Its service has long been lauded for its ease of use, but its “hundreds of thousands” of users pale in comparison to the millions of users counted by WordPress or Tumblr or other website creation tools, not to mention the millions of users counted by rival hosting service Go Daddy. Squarespace doesn’t have to force those companies out of the market to thrive, but it does need to offer a compelling service that people have heard about to survive.
“This partnership with General Atlantic signals the scaling of our ambition,” Casalena said in a statement. “We will improve the overall Squarespace experience, make it available to more people around the world, and demonstrate a commitment to products that go beyond websites and online stores.” The fact that all of that costs as much as its marketing budget shows just how important the two expenditures are to Casalena’s hopes for the nascent company.