When the recent blockbuster $365 million Square-Weebly acquisition was announced, Surepath Capital’s Shubham Datta and I jumped on the line to record an OnTarget podcast to run through why Square would do this and whether we thought it was a good idea.
Datta believes acquiring the self-service site builder, which has a substantial ecommerce offering, is all about turning Square into a full “omni-channel” commerce solution for small businesses.
“This makes a lot of sense for Square,” Datta said. “Square has traditionally been for offline businesses like farmers markets and food trucks. Now this allows them to really get into omni-channel commerce, which has been a big focus for them in 2018.”
As I note in my intro to this podcast, this move further validates the Tech Adoption Index thesis that companies like Square that start in one solution will continue expanding via natural adjacencies until the have a complete operating system like service offering for SMBs.
Datta echoed this observation, noting the Weebly deal “enables merchants to set up online stores and get the full experience on all of Square’s ecosystem, whether it’s payments, appointments, payroll. It brings together offline and online into omni-channel commerce, into one cohesive unit for entrepreneurs.”
Here are some other key observations from the podcast:
- Another advantage of the Weebly deal is that 40% of the site builder’s customers are international. International expansion is another 2018 priority for Square.
- The deal represents a clear shot across Shopify’s bow. Square and Shopify have been known as the enablers of offline and online commerce, respectively. By acquiring Weebly, Square has veered aggressively into Shopify’s lane.
- We also discussed Square’s acquisition of Zesty, announced the same week as the Weebly deal. Zesty will combine with Square’s existing Caviar operation, deepening Square’s involvement in the food vertical. Zesty is focused on the higher-margin corporate catering business, while Caviar does delivery for high-end independent restaurants.
For some more perspective on Square-Weebly, check out SurePath founder Mark MacLeod’s take on the deal.
You can listen to the full OnTarget podcast below: