‘The reopening is now’: Lightspeed used the pandemic to bulk up — now it’s time for the next phase of its strategy  

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Lightspeed POS Inc. is transferring to broaden its acquisition technique past its point-of-sale origins because it goals to push deeper into e-commerce within the post-pandemic world.

The Montreal-based software program supplier, which makes cloud-based merchandise for small and impartial retail, restaurant and golf companies, has grown quickly since going public two years in the past, fuelled largely by acquisitions. Since November, Lightspeed has built-in three international rivals however is now trying to totally different segments and geographical markets in an try and scale as much as compete extra straight with on-line retail giants resembling Amazon.

“We’re transferring from being a point-of-sale and funds supplier to a one-stop commerce platform supplier,” founder and chief government Dax Dasilva advised the Monetary Publish in a current telephone interview.

Dasilva is betting that, as pandemic-ravaged economies get better amid shifting client preferences, companies can be keen to achieve prospects by way of each brick-and-mortar shops and digital platforms, and he desires Lightspeed’s choices to cowl each channels.

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“The time is now,” Dasilva mentioned. “The rationale that these acquisitions are essential now could be as a result of the reopening is now. We anticipated that and final 12 months was a 12 months of pivoting prospects, however this subsequent 12 months can be certainly one of individuals transferring to new programs or opening new companies.”

Late final 12 months, Lightspeed accomplished the 2 largest offers in its 16-year historical past. It bought New York-based cloud-based point-of-sale system ShopKeep Inc. in November for US$440 million, including greater than 20,000 retail and restaurant buyer places. Lower than a month later, it acquired Rhode Island-based restaurant administration software program supplier Upserve Inc. for US$430 million, bringing on 7,000 places.

Then in April, it added New Zealand-based Vend Ltd., a cloud-based retail administration platform, for US$350 million, practically doubling its buyer base within the Asia-Pacific area. After integrating Vend, Lightspeed mentioned it is going to have 140,000 buyer places, up from 80,000 within the second quarter ending Sept. 30.

The deal was the corporate’s seventh acquisition because it launched its IPO on the Toronto Inventory Alternate in 2019 and the twelfth in its historical past.

Alongside the way in which, Lightspeed has added options as effectively, together with funds processing early final 12 months and a provider community characteristic in January to assist small to medium retailers and impartial suppliers higher compete with e-commerce giants. Earlier this month, it additionally struck a partnership with Alphabet Inc.’s Google to permit small companies to promote to native consumers in search of alternate options to massive on-line retailers.

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The string of current offers got here towards the backdrop of the worldwide pandemic, which initially noticed small retailers and eating places wrestle beneath lockdown restrictions.

However as in-store closures pressured companies to shift to on-line, Lightspeed has seen its income progress speed up once more.

In its fiscal fourth quarter, income jumped to US$82.4 million, up 127 per cent from the identical interval the earlier 12 months.

Whereas its internet loss greater than doubled as effectively, climbing to US$42 million from US$18.6 million in the identical interval a 12 months earlier, Dasilva factors to the corporate’s natural progress, which rose 48 per cent, and the sturdy efficiency of its most up-to-date acquisitions, with ShopKeep and Upserve contributing $31.2 million in income as optimistic indicators.

This subsequent 12 months can be certainly one of individuals transferring to new programs or opening new companies

Dax Dasilva

Although a big portion of Lightspeed’s scale has come from its aggressive M&A technique, some analysts observe the corporate has demonstrated it has the capability to handle additional M&A offers.

“Whereas acquisitions have performed a distinguished position in driving progress, Lightspeed has executed equally on natural drivers,” mentioned Nationwide Financial institution Monetary analyst Richard Tse in a observe following earnings. “Backside line, whereas the tempo of measures has been speedy, Lightspeed’s capability to execute (as evidenced by the outcomes) inside that continues to be what’s most spectacular to us.”

Whereas the shopping for spree will proceed, Dasilva mentioned he’s not all in favour of constructing a portfolio of firms; as an alternative, he plans to fold acquisitions beneath the Lightspeed model. He mentioned Lightspeed is ready to conduct M&A at a speedy tempo as a result of the businesses it acquires supply related merchandise in new markets, and the groups are built-in in a approach that incentivizes engagement.

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Upserve and ShopKeep’s former chief government officers, Sheryl Hoskins and Michael DeSimone, joined the senior management ranks at Lightspeed, and the corporate made its largest acquisitions with a mixture of money and inventory to encourage buy-in from the groups it brings onboard. In its US$440 million cope with Shopkeep, for instance, Lightspeed provided US$145.2 million in money, with 9.5 million shares making up greater than half of the stability.

Lightspeed is now trying past simply retailers it serves in an try so as to add new platforms for suppliers and shoppers, with providers together with on-line ordering and curb-side pickup. Dasilva mentioned he’s additionally trying to increase the corporate’s footprint within the U.S., in addition to Europe and Asia.

“You’re going to see a development in our M&A in direction of firms that speed up {our capability} relating to these platforms,” Dasilva mentioned. “The rationale why you’ve seen this occur on this sequence is since you’re not going have suppliers be part of the platform if there weren’t already a base of 140,000 retailers, and that’s what we’ve been constructing within the final two years in bringing collectively these related firms.”

Monetary Publish

• Electronic mail: smarotta@postmedia.com | Twitter: StefanieMarotta