Canada’s Lightspeed POS is on a mission to own the “omnichannel commerce” space, as the company calls it, globally. Yesterday it announced it will acquire Vend, a retail-focused point of sale software company based in New Zealand. Lightspeed is picking up Vend $350 million.
The deal is split, with $192.5 million in cash and $157.5 million in stock. Vend generated $34 million in revenue in 2020 based on $7 billion in gross transaction volume. So the deal comes to roughly a 10x multiple on revenue. Lightspeed says the deal should close by the end of April.
Kiwi engineer and entrepreneur Vaughan Rowsell launched Vend in 2010 in Auckland, New Zealand. The company’s current CEO is Ana Wight, who joined Vend in 2017 as its chief commercial officer.
“Lightspeed’s global excellence and commitment to community is inspirational to Vend,” Wight said in a statement. “By joining forces, we will power the global transformation of retail and pour our unparalleled collective efforts into the success of our retailers at this pivotal moment in our industry. As a New Zealand-based company, we’re proud to be globally recognized for the product and company we have built and are excited about this next step in our journey.”
Series of Acquisitions
Lightspeed left a few open questions about its plans for Vend. For example, will the Vend brand carry on? And will the management team remain in place? How Lightspeed has handled its previous acquisitions offers some clues.
In December we reported Lifghtspeed’s acquisition of restaurant management platform Upserve for $430 million in cash and stock. That acquisition came soon after Lightspeed acquired ShopKeep, a POS company focused on the restaurant space. Both companies continue to operate as independent brands, with the same look and feel. The big change is the addition of a “by Lightspeed” modifier under the brand.
Lightspeed seems to have a preferred deal model, with a mix of cash and stock. The Upserve deal involved $123 million in net cash, with the remaining $307 million in stock. ShopKeep got a similar deal, earning $145.2 million in cash and $295 million in stock. Notably, Vend got more cash in the deal, in both real and percentage terms. The Upserve deal had a similar multiple, with $430 million for a company with $40 million in revenue. The higher cash portion in Vend’s deal may just reflect the degree to which Lightspeed wanted it. Or Vend’s negotiating skill. Or both.
In 135,000 Locations
Lightspeed’s strategy seems to be about acquiring rival it respects. Then allow them to continue to serve their customers while cross-selling Lightspeed’s suite of products, which go well beyond the point of sale. For example, Lightspeed offers the typical Covid-era toolkit. Notably eCommerce, order ahead, and delivery software. It also offers loyalty, payments (for retail), accounting (for restaurants), and more. It also has a set of solutions for the golf industry.
So here is how Lightspeed describes what happens post-close with Vend.
“Subsequent to the closing of the acquisition, Lightspeed will serve as the technology partner of choice for over 135,000 customer locations worldwide,” Lightspeed wrote. “As small and medium-sized businesses increasingly turn to the company’s innovative, cloud-based platforms ahead of highly-anticipated economic reopenings in both the retail and hospitality industries. Building on the landmark acquisition of ShopKeep, Lightspeed intends to leverage Vend’s complementary modern technology stack and user experience capabilities to continue to deliver the most advanced commerce capabilities to retailers around the world.”