The Company Behind WordPress Invests in Newspaper Toolmaker OwnLocal

The open source blogging start-up Automattic has made its first investment, leading a round of funding in Austin, Texas-based OwnLocal, which offers tools for newspapers to help local businesses with their Web presence.

OwnLocal is also one of the first for-profit investments by the Knight Enterprise Fund for media innovation; additional funding comes from 500 Startups and investors found through AngelList.

The total amount of funding OwnLocal has raised is still pretty small: Just $2 million. That’s because the company is already supporting its 20 employees based on revenue, said OwnLocal founder and CEO Lloyd Armbrust.

OwnLocal serves local media outlets in 35 states, with white-label tools for directories, search engine optimization, daily deals and other services to help local businesses.

Automattic CEO Toni Schneider said he expects to make more investments in the WordPress ecosystem. “Their approach is highly complementary to our own goals of making it easy for anyone in the world to have a beautiful Web site,” added Automattic founder Matt Mullenweg.