Posted on Wednesday, Mar 25th 2015
According to a research study conducted by BigCommerce, e-commerce sales will grow to $2 trillion in 2015 with the SMB segment in the US alone accounting for over $100 billion in sales. Billion Dollar Unicorn club member Shopify is helping retailers make their mark in the dot-com space.
Ottawa, Canada-based Shopify was founded in 2006 by Tobias Lütke, Daniel Weinand, and Scott Lake. The three got together to set up an online store Snowdevil to sell snowboarding equipment. While setting up Snowdevil, they wanted to list their products on a number of marketplaces, but they also wanted to own their brand and build relationships with their customers while being able to sell their goods. They realized that at that time, such a tool did not exist and they had to make one for themselves. Soon, this venture was extended to other stores and Shopify came into being.
Shopify allows merchants to use their platform to manage multiple aspects of their business encompassing products, orders, and customers. Businesses can use their platform to sell online as well as through retail stores and on the mobile devices.
For the digital experience, Shopify allows businesses to set up an online storefront. Users can access their library of more than a hundred themes to design the website. Shopify also provides features such as the ability to create a mobile commerce shopping cart, brand and customize the store, use their own domain name, and even utilize Shopify’s experts to help set up the website. To help enable e-commerce transactions, Shopify helps stores set up secure shopping carts, accept credit cards, calculate shipping rates and taxes on sale, and help with fulfillment, manage customer profiles and accounts. Shopify’s customers also have access to marketing and analytic tools to improve their business returns.
For a retail store, Shopify offers a point-of-sale system on an iOS device. The system allows for the ability to add products and sync inventory real-time. The app comes with a credit card reader to help process payments along with the ability to store data on the cloud and use analytic tools to track sales and growth.
Shopify’s platform has over 150,000 active stores and has helped deliver over $7 billion in sales. Their customer list includes names like Tesla Motors and the Gatorade Inc.
Shopify offers multiple price points for their customers to choose from. The basic digital store option starts at $29 per month with an additional 2.9% and a $0.30 per transaction fee for transactions conducted online and 2.7% of the transaction value for transactions conducted on their point-of-sale systems. The basic plan comes with features such as 1 GB file storage, 24×7 support, discount code engine, and fraud analysis tools. Advanced options are priced at $179 per month with an online transaction charge of 2.25% and $0.30 per transaction and 2.15% of transaction value for all in person sales. The premium option comes with additional features such as professional reports, ability to deal in gift cards, advanced cart, reporting tools, and real-time career shipping details.
Shopify does not disclose their financials. They have been venture funded so far with $122 million raised from investors including Felicis Ventures, Georgian Partners, Bessemer Venture Partners, FirstMark Capital, Insight Venture Partners, and OMERS Ventures. Their last round of funding was held in December 2013 when they raised $100 million at a valuation of $1 billion.
The company is now said to be preparing to go public and list on either the US or the Canadian exchange. Analysts expect them to raise another $100 million through this IPO. They have already identified Morgan Stanley, Royal Bank of Canada, and Credit Suisse Group AG to lead the IPO.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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