Pixel Union's Triple Exit

Andrew Wilkinson shares the story of how he built and sold Pixel Union, only to buy it back years later and take it public.

"I was running MetaLab and was an early Tumblr user. I met David Karp, the CEO of Tumblr, and I made a Tumblr theme that I wanted to use myself. He said 'This is really cool, I would love if you could create more of these. We're going to make a premium marketplace.'

I wasn't thinking of it as a business, but I asked my designers to whip up some themes over the weekend. I had my brother's friend, who just finished a philosophy degree, help turn it into what became Pixel Union. It started doing $10,000 a month in revenue. It was my first taste of automatic revenue - I would go to sleep and wake up to $500 worth of theme sales.

Shopify noticed what we were doing for Tumblr and asked us to do the same for them. At the time they were tiny, about 15 people. Tumblr eventually died post-Yahoo acquisition, but we spun the business out of MetaLab. We sold it in 2014 for $14 million. I kept 20% and stayed on the board.

A couple years ago, we bought it back for $26 million when it was doing about $4 million in annual profit. We did a bunch of acquisitions and then took it public at a $260 million valuation.

Looking back, selling for $14 million was a mistake. The business was growing 50% a year and I didn't know how to value a business properly. But it forced me to learn about investing when I suddenly had this pile of cash."