Notes from the Shopify S-1 IPO Filing

Earlier today Shopify announced that they had filed for an IPO and released their S-1 document with the SEC. Shopify is the top Software-as-a-Service ecommerce provider powering over 160,000 online stores. Personally, I’ve talked with a number of ecommerce entrepreneurs and Shopify always comes up as one of the best solutions.

Here are a few notes from the Shopify S-1 IPO filing:

  • 900 apps in the Shopify App Store (pg. 1)
  • Revenues (pg. 2)
    2012 – $23.7 million
    2013 – $50.3 million
    2014 – $105.0 million
    2015 Q1 – $37.3 million
  • Net losses (pg. 2)
    2012 – $1.2 million
    2013 – $4.8 million
    2014 – $22.3 million
    2015 Q1 – $4.5 million
  • 162,261 customers with an annualized revenue of $1,000/year (pg. 3)
  • Company started September 28, 2004 in Ottawa, Canada (pg. 5)
  • 632 employees (pg. 13)
  • Accumulated deficit of $33.6 million (pg. 13)
  • Stripe powers the payments processing (pg. 15)
  • Separate Class A and Class B shares where the Class B shares have 10 votes, meaning the executives control the company (pg. 31)
  • Subscription revenue accounted for 63.5% of revenue (pg. 53)
  • Payment processing fees accounted for 36.5% of revenue (pg. 54)
  • Payment processing solutions are for both online and offline sales (pg. 54)
  • Most revenue collected is in U.S. dollars but most expenses are in Canadian dollars, so exposed to currency fluctuations (pg. 56)
  • U.S. represents 68.7% of revenues (pg. 61)
  • 85.5% gross margins (pg. 63)
  • Shopify started as an online snowboarding store and then became a software company when no ecommerce system could be found to the CEO’s liking (pg. 82)
  • Core values (pg. 97)
    Get shit done
    Build for the long-term
    Focus on simple solutions
    Act like owners
    Thrive on change
  • Founder ownership – 14.6% (pg. 127)
  • Bessemer Venture Partners ownership – 30% (pg. 127)

To clear a $100 million run-rate while only having an accumulated deficit of $33.6 million is incredible — super capital efficient. Combine the capital efficiency with scale and a growth rate that’s still over 100%, and you have an amazing story that’s going to do well in the public markets. It’ll be interesting to see how public investors discount, or don’t, the payment processing fees as they aren’t as valuable as the subscription fees, but are still valuable nonetheless. Shopify is a major success story.

What else? What are some more thoughts on the Shopify S-1 IPO filing?

2 thoughts on “Notes from the Shopify S-1 IPO Filing

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s