SHOPIFY SUCCESS STORY SOFTWARE
But it has also emerged as the leader of a group of online software providers who have democratized e-commerce by substantially reducing how much it costs to set up and manage online stores.Ī typical Shopify customer spends less than $100 per month to use the software, a tiny fraction of the cost to retailers just a few years ago to operate an e-commerce site. Shopify is one of several Canadian startups that have attracted significant financing from U.S. Shopify and its Canadian startup peers, including HootSuite, are beginning to fill the void left by the fall of former Canadian tech heavyweights Nortel Networks and BlackBerry, while Shopify has provided much-needed optimism to Ottawa, whose large technology sector is a shadow of itself during the peak of Internet mania in the late 1990s. "Focusing on extracting things out of the ground and selling them is not the path to future prosperity in this country – and not the path of where the future jobs are … Shopify is going to represent companies a long-term sustainability in this country that they will be the acquirers, not the acquired."
"For me, this deal represents the future of Canada," said John Ruffolo, CEO of OMERS Ventures. It plans to use the funds for acquisitions and to expand into foreign markets. Next year it expects to hire hundreds more and will move out of its crowded space in an aging Byward Market warehouse building to new downtown offices on Elgin Street. The company is on pace to earn upwards of $50-million in revenues per year and has more than 300 employees, up from 140 a year ago. Retailers who use Shopify software are on track to book more than $1.6-billion in sales this year, up from $132-million in 2010. The company recently began offering a comprehensive software system that enables retailers to run both physical and online operations on an iPad. On Wednesday, it signed up its 80,000th customer, which range from the Amanda May lingerie shop in Ottawa to Tesla Motors. Shopify has been doubling in size every year for the past four years.
"It's certainly on a trajectory to do that." "Shopify has the potential to be as profitable and exciting as any investment we've ever made," said Jeremy Levine, a partner with Bessemer, which invested early in Internet successes LinkedIn, Skype and Yelp. Website TechCrunch recently determined that only 39 tech firms born since 2003 in the U.S., including Facebook and Twitter, have reached the $1-billion level, as valued by public or private markets, making them members of the so-called "Unicorn Club."
Reaching the $1-billion level is extremely rare. "Most don't realize how well it's going." "I think everyone in the company has a sense Shopify is doing well," said Tobias Lütke, Shopify's 33-year-old co-founder and CEO, noting that employees own more than 20 per cent of the firm. Sources familiar with the deal say it values the company at $1-billion.
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