Shopify had revenue of $988.6 million in the first quarter, up 110% year-over-year. The goal is to become an all-in-one business dashboard for these merchants. By providing payment processing, point of sale systems and loans, Shopify is seeking to provide everything a small business owner needs to operate a business online. The company positions itself as a counterpoint to Amazon by enabling smaller merchants to create their own stores and develop their own relationships with customers.įinancial services have become a big part of the company's business. Subscriptions offer revenue visibility to Shopify.The pandemic supercharged Amazon's ecommerce machine - but the same phenomenon strengthened a rising rival, Shopify, which takes a very different approach to selling online. The merchant subscription business is a SaaS business where companies pay a certain fixed amount to Shopify each month based on their size. Shopify has two main revenue streams: merchant subscriptions and merchant solutions. Growth remained strong Shopify’s revenue for the first 9 months of 2021 increased by 65% versus the same period in 2020.
We think that the risk-adjusted expected return is superior today.Īt the beginning of 2021, market observers believed that the growth of pure digital commerce enablers like Shopify would come down significantly following a booming 2020 year. The market value has multiplied, and the valuation is lower than when we initiated the investment. Today, it has become the dominant operating software platform for commerce with over 43,000 ecosystem partners and almost two million merchants. Early on we had a lot of respect for Tobi Lütke and his team, and we understood the enormous opportunity that laid in front of them. "When we first bought the shares in 2016, we were generally right about the fact that Shopify would be an important player in facilitating digital commerce by offering merchants good software.
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