THE BLOG

Website-Builders Lay Solid Foundations

20/05/2014 13:32 BST | Updated 19/07/2014 10:59 BST

There is a lot of buzz right now in the website-building industry. Weebly, the eight-year old startup, has recently been valued at $455m after its latest round of funding from Chinese Internet giant Tencent and venture capital firm Sequoia Capital.

Moving from West coast to East coast you'll also see Squarespace sitting on another recent round of VC funding, this time to the tune of $79m.

These represent huge amounts of investor cash. But why is the website building industry suddenly so exciting to the investment community?

One of the first answers to this question is the power of the Internet for businesses. Ten years ago, smartphones were not commonplace, and businesses didn't fail simply because they weren't accessible online. Ten years later however, and smartphones are in the pocket of nearly every consumer. Lacking a presence online as an SME in today's world is simply not an option - no website, no business.

Website-builders such as BaseKit have capitalised on the growing demand for do-it-yourself websites that don't look as though a primary school child has been in charge of the coding. The demand for easy-to-use, good-looking websites has spurred this growth, and led to the investor community waking up to the potential of this sector.

So where will the sector go from here? According to the government's report on micro-businesses, around 25% still don't have a website. And this is in the UK, one of the more digitally savvy global regions. Looking to other countries there is clearly an opportunity for the website building community to expand and reach new customers.

There is also a huge appetite for website building. BaseKit itself is seeing 40,000 new websites created per month using its platform via hosting company partners. BaseKit aims to deploy more than 100,000 new websites per month before the end of 2014. This is a hugely aggressive market, with new customers generating huge amounts of revenue for the sector, and shows no signs of slowing down. Music to an investor's ears!

But what does this mean for consumers? This growth in investment means competition amongst website-builders is increasing, which in turn will result in greater choice available to consumers and small business owners. This competitive environment means that market players will be forced to work harder to earn attention from potential customers, which can only be a good thing.

The growth in this sector bodes well for local businesses, and in turn consumers, as the sector branches out to offer specific services for different industry verticals. Google recently purchased Appetas, a website-builder specifically for the restaurant industry. This was done to help Google compete against the likes of Yelp and other local, directory-based services, and it demonstrates the business' demand for quality website-builders as they seek to better serve their customers. For the consumer, this means more choice, better websites, and easier access to quality local businesses.

This investment demonstrates that for both businesses and consumers alike, the growth of the website-building industry benefits all parties. Businesses benefit from an increase in the number of options available to them in terms of creating exciting, functional websites. For consumers, they are given more choice with greater access to a wider selection of businesses.