Shopify Inc. filed an F-1 form with the U.S. Securities and Exchange Commission (SEC) for its initial public offering (IPO). There were no terms given for the offering, but it is valued up to $100 million in stock to be sold. The underwriters for this offering are Morgan Stanley, Credit Suisse, RBC, Dominion Securities, Pacific Crest, Raymond James and Canaccord Genuity.
Shopify is a cloud-based commerce platform designed for small and medium-sized businesses. Merchants use the software to run their business across all of their sales channels, including Web, tablet and mobile storefronts, social media storefronts, and brick-and-mortar and pop-up shops.
What makes Shopify unlike many other e-commerce players is that it allows users to have no e-commerce experience, with a design of over 100 templates. Shopify also claims to have over 120,000 online stores powered here, dating back to its 2006 launch out of Canada.
While Shopify was started up to help merchants design, set up and manage their online stores, it has expanded far beyond that. The Shopify platform provides merchants with a single view of their business and customers across all of their sales channels and enables them to manage products and inventory, process orders and payments, build customer relationships and leverage analytics and reporting. Merchants can also use Shopify Mobile, an iPhone and Android application, to manage their business on the go.
This platform was built from the ground up to address the growing challenges facing merchants, with the aim of making previously complex tasks simple. The Shopify platform has been engineered to enterprise-level standards and functionality while being designed for simplicity and ease-of-use. The platform provides merchants with an intuitive user experience that requires no up-front training to implement and use, enabling merchants to set up their shops in less than 15 minutes.
The Shopify business has experienced rapid growth. Total revenue increased to $105.0 million in 2014 from $50.3 million in 2013 and from $23.7 million in 2012, representing year-over-year increases of 109.0% and 111.9%, respectively. Additional, the company had net losses of $22.3 million in 2014, $4.8 million in 2013 and $1.2 million in 2012.
The company plans to use the proceeds as follows:
Principal reasons for this offering are to increase our capitalization and financial flexibility, increase our visibility in the marketplace and create a public market for our Class A subordinate voting shares. We currently expect to use the net proceeds from this offering for working capital and general corporate purposes, including to fund our growth strategies, which may include: increasing our investment in sales and marketing, research and development and general and administrative functions.