With the explosion of ecommerce, open source ecommerce solutions such as Varien’s Magento, are gaining the attention of startups and established industry players. According to this SEC filing, Varien has raised $22.5 million in an equity deal to an undisclosed investor. According to TechCrunch, it may very well be Paypal, who has been collaborating with Magento on product development since 2008.
We didn’t hide the challenges Magento faces in distributing an open source ecommerce solution when we covered Magento last November, but customers continue to adopt Magento as their ecommerce platform of choice. Back then, the company had one million installations, today total downloads reached a million and a half (50% growth for those slow in math), reaching $25 billion in transactions volume (show me another startup that can say the same and I will invest). Similar to WordPress and Israel’s Zend, Magento has an active open source community, developing extensions and plugins for free. Furthermore, Magento was successful in creating an eco-system of developers who specialize in customizing the platform, for a fee.
Varien was founded in 2001 by CEO Roy Rubin and is based in Los Angeles. It launched its paid enterprise solution version in April 2009, pricing it around $5,000-$10,000 per license, depending on the deal. You can get a taste of what the platform looks like on the demo page.