Canadian point of sale software giant Lightspeed continues to use its robust stock as currency to roll up rivals and bolt on new capabilities.
The two companies are among the many that compete to varying degrees with Shopify to enable small, midsize, and even larger companies to sell online. Others directly in the space include the likes of Woo Commerce and BigCommerce. Then you need to add to the mix website builders with eCommerce capabilities like Wix, Squarespace, Weebly, and many others. And voila, the eCommerce space looks very, very crowded.
Certainly, the eCommerce business had a real moment during the pandemic. But consolidation seems like it was inevitable.
The Ecwid and NuORDER deals break down this way.
Lightspeed is paying $500 million for ECWID, with $175 million and the remaining $325 million in subordinate shares of Lightspeed stock. Lightspeed is paying less for NuORDER, $425 million. But the terms are a bit more generous. NuORDER is getting exactly half of its payout, $212.5 million, in cash. The remaining half is in stock.
The reason why NuORDER got better terms is unclear. The company does have a B2B focus that sets it apart from ECWID. NuORDER’s purpose is to connect businesses with suppliers. Meanwhile, Ecwid, is much more of a direct Shopify competitor. This distinction may have had some bearing on the terms. Also, NuORDER is more brand-focused than Ecwid.
Lightspeed says both deals will close on September 30 this year.
Why eCommerce, Why Now?
These deals seem to be designed to flesh out the service bundle that Lightspeed brings to its customers. According to the press release announcing the deal, Lightspeed will have access to thousands of new customers that it can upsell into its existing product suite. Ecwid, for example, has 130,000 paying customers on its platform across 100 countries. And NuORDER has 3,000 brands using its platform.
So here is what Lightspeed Founder & CEO Dax Dasilva said about the deal.
“By joining forces with Ecwid and NuORDER, Lightspeed becomes the common thread uniting merchants, suppliers, and consumers, a transformation we believe will enable innovative retailers to adapt to the new world of commerce. As economies reopen and business creation accelerates, we hope to embolden entrepreneurs with the tools they need to simplify their operations and scale their ambitions.”
Since December 2020 and included the latest transactions, Lightspeed has invested $2.15 billion in acquisitions. These include restaurant management software player Upserve and rival POS software companies ShopKeep and Vend. A consistent feature of all of these deals has been Lightspeed’s heavy reliance on its stock for currency. Combined, these deals were made with 60.5% stock and 39.5% cash.
There does remain one lingering question. Are NuORDER’s founders big fans of ’80s new wave music?