What Does Squarespace Going Private Mean for You? A Squarespace Expert Weighs In.
On May 13, 2024, Squarespace announced that it would be acquired by Permira, a global equity firm, for a staggering $6.9 billion. This monumental deal will take Squarespace private again after 3 years of being a public traded company on the NYSE. Naturally, you’re probably trying to understand what the transition could mean for the short and long term future of the platform, and the implications for your business. I’ve even seen people freaking out on Threads and Reddit, wondering if they should abandon their website builds and switch to another platform. Not so fast. There are pros and cons to this story, so let me break them down for you and calm your nerves.
1. Squarespace is not shutting down
Many times, when a company announces a buyout or acquisition, we’ve become accustomed to seeing that as the potential demise of whatever was being bought. Examples like the Dark Sky app being bought and shut down by Apple, or Google’s rich history of creating services and then shutting them down (cough Google Domains to Squarespace cough) come to mind. But Squarespace is far too big to shut down, and there are millions of websites on their platform. Simply put, Squarespace isn’t going anywhere. Permira isn’t acquiring Squarespace just to pick it apart and shut it down, especially after spending that much capital.
2. Increased investment and resources
One of the most significant advantages of being acquired by a private equity firm like Permira is the potential influx of capital. With $7 billion on the table, Permira is likely to invest heavily in Squarespace’s infrastructure, technology, and product development. This could lead to faster innovation cycles, better performance, and the introduction of new features that could enhance your experience. We’ve already seen Squarespace rapidly providing updates to Fluid Engine and 7.1, and there are even more new features planned over the coming months. Remember, Squarespace Courses launched just under a year ago, so expect to see more features coming soon.
3. Potential price increases
To recoup the investment and drive profitability, Permira might decide to increase subscription rates for Squarespace users. This possibility could be concerning for small businesses and individual users who rely on Squarespace’s affordability. Any significant price hikes could drive users to seek alternative platforms, potentially impacting Squarespace’s user base and market share. I’ve already seen in the last 6-8 months some of my clients complaining at how much their subscriptions are, especially since you need multiple subscriptions to use a lot of their services and products. Squarespace is already driving themselves out of some of the lower-level DIYers pockets, simply due to the fact a one page website with a blog can cost $25/month, and you can’t use custom code. There are numerous other platforms that can do the same thing for $5, $10, even $15/month. It would be nice to see some changes to a lower cost with less features to allow for more basic sites, but it remains to be seen what will happen here.
4. Focus on long-term growth
As a private company, Squarespace will no longer be subjected to the quarterly earnings pressures that public companies face. This shift allows for a greater focus on long-term strategic goals rather than short-term financial performance. Permira’s involvement could enable Squarespace to take bold steps in expanding its market reach, improving its product suite, and enhancing its competitive edge without the constant scrutiny of public markets. This is beneficial, especially for users, because Squarespace has a tendency of releasing new features before they’re ready. Circle Members got access to a beta of a new feature just a week ago, that led to massive slowdowns and memory usage in browsers. Squarespace has now fixed it, but that’s a reason why it’s better to test new features for a lengthier amount of time, instead of rushing it out to appease public investors.
5. Potential for improved customer service
With new ownership and an emphasis on growth, there could be a renewed focus on customer satisfaction. Private equity firms often prioritize operational efficiencies, which might translate into better, more responsive customer service. Improvements in this area could significantly enhance the user experience, addressing one of the common pain points for current users. I’ve heard on nearly a weekly basis people complaining about how customer service is lacking with Squarespace, especially now that they’ve introduced an AI chatbot that scans help articles to reduce the number of inquiries their live chat team members have to answer. This would be a welcome addition if it’s a focus of Permira.
What are some of the short-term and long-term changes users should watch out for?
Short-Term Implications
In the immediate aftermath of the acquisition, you probably will not notice significant changes. Squarespace will likely continue to operate as usual while the new ownership evaluates the business and plans its strategic moves. In fact, this deal isn’t supposed to close until late 2024. So nothing likely will happen publicly or privately until 2025. Just keep an eye out for announcements from Squarespace regarding changes in pricing or customer service, or even new feature rollouts.
Long-Term Implications
The long-term impact of Permira’s acquisition will unfold over the coming months and years. If Permira’s track record is any indication, we can expect a focus on scalability, efficiency, and profitability. This could mean a more robust and feature-rich platform, albeit potentially at a higher cost. After working with Ancestry, Zendesk, Dr. Martens, and Informatica, all of those companies saw booming profits and accelerating growth.
Conclusion
Even though an acquisition can seem scary and worrisome when it first happens, the implications of these kinds of buyouts take time to appear to the general public. My opinion on the matter is simple: this acquisition won’t affect you in the short term, and likely won’t have much of an impact on any users of the Squarespace platform until at least 2025. We might hear rumblings of things now and again, but in the meantime, keep building your business. Focus on growing your brand, whether it’s on Squarespace or elsewhere!
Additional reading and sources:
Squarespace to Go Private in $6.9B All-Cash Transaction with Permira
Permira’s Acquisition History
Your Designer
Hi friends! I'm Justin Mabee, a veteran Squarespace website designer with over 12 years of experience building websites. As a top-rated Squarespace web designer, I build rich, interactive sites that don’t look like anyone else’s out there – and they’re intuitive enough for you to pick up and run with after we publish. Got questions about Squarespace or need some help with your site? Let’s get some time together to talk about it.
