Shopify

Shopify Inc. is a Canadian multinational e-commerce company headquartered in Ottawa, Ontario. It is also the name of its proprietary e-commerce platform for online stores and retail point-of-sale systems.[3] Shopify offers online retailers a suite of services including payments, marketing, shipping and customer engagement tools.[4]

Shopify Inc.
TypePublic
IndustryE-commerce
Founded2006 (2006)
Ottawa, Ontario, Canada
Founders
Headquarters
Ottawa, Ontario
,
Canada
Area served
Worldwide
ServicesOnline shopping
Revenue US$1.578 billion (2019)[1]
US$−141.2 million (2019)[1]
US$−124.8 million (2019)[1]
Total assets US$3.489 billion (2019)[1]
Total equity US$3.016 billion (2019)[1]
Number of employees
5,000+[2]
Websiteshopify.com

The company reported that it had more than 1,000,000 businesses in approximately 175 countries using its platform as of January 2021, but according to Builtwith, more than 3.6 million online stores run on Shopify.[5][6][7] The total gross merchandise volume exceeded US$61 billion for calendar 2019.[8]

History

Shopify was founded in 2004 by Tobias Lütke and Scott Lake after attempting to open Snowdevil, an online store for snowboarding equipment. Dissatisfied with the existing e-commerce products on the market, Lütke, a computer programmer by trade, instead built his own.[9][10][11] Lütke used the open source web application framework Ruby on Rails to build Snowdevil's online store, and launched it after two months of development.[12][13] The Snowdevil founders launched the platform as Shopify in June 2006.[12]

In June 2009, Shopify launched an application programming interface (API) platform and App Store. The API allows developers to create applications for Shopify online stores and then sell them on the Shopify App Store.[14]

In April 2010, Shopify launched a free mobile app on the Apple App Store. The app lets Shopify store owners view and manage their stores from iOS mobile devices.[15] In 2010, Shopify started its Build-A-Business competition, in which participants create a business using its commerce platform.[16][17] The winners of the competition receive cash prizes and mentor-ship from entrepreneurs, such as Richard Branson, Eric Ries and others.[17] Shopify was named Ottawa's Fastest Growing Company by the Ottawa Business Journal in 2010.[12] The company received $7 million from an initial series A round of venture capital financing in December 2010.[18][19] Its Series B round raised $15 million in October 2011.[20]

In February 2012, Shopify acquired Select Start Studios Inc ("S3"), a mobile software developer, along with 20 of the company's mobile engineers and designers.[21][22] In August 2013, Shopify acquired Jet Cooper, a 25-person design studio based in Toronto.[23]

In August 2013, Shopify announced the launch of Shopify Payments, which allowed merchants to accept credit cards without requiring a third party payment gateway.[24] The company also announced the launch of an iPad-centric point of sale system. It uses an iPad to accept payments from debit and credit cards. The company received $100 million in Series C funding in December 2013.[25]

By 2014, the platform had hosted approximately 120,000 online retailers,[13][15][26] and was listed as #3 in Deloitte’s Fast50 in Canada, as well as #7 in Deloitte’s Fast 500 of North America.[27] Shopify earned $105 million in revenue in 2014, twice as much as it raised the previous year.[28] In February 2014, Shopify released its enterprise solution "Shopify Plus" for large e-commerce businesses with access to additional features and support.[29]

On April 14, 2015, Shopify filed for an initial public offering (IPO) on the New York Stock Exchange and Toronto Stock Exchange under the symbols "SHOP" and "SH" respectively.[30][31] Shopify went public on May 21, 2015, and in its debut on the New York Stock Exchange, started trading at $28, more than 60% higher than its US$17 offering price, with its IPO raising more than $131 million.[32][33][34]

In September 2015, Amazon.com announced it would be closing its Amazon Webstore service for merchants, and had selected Shopify as the preferred migration provider;[35] Shopify's shares jumped more than 20% upon the news.[36]

On October 3, 2016, Shopify acquired Boltmade.[37] In November 2016, Shopify partnered with Paystack which allowed Nigerian online retailers to accept payments from customers around the world.[38] On November 22, 2016, Shopify launched Frenzy, a mobile app that improves flash sales.[39] On December 5, 2016, Shopify acquired Toronto-based mobile product development studio Tiny Hearts. The Tiny Hearts building has been turned into a Shopify research and development office.[40]

In January 2017, Shopify announced integration with Amazon that would allow merchants to sell on Amazon from their Shopify stores.[41] Shopify's stock rose almost 10% upon this announcement.[41]

In April 2017, Shopify introduced a Bluetooth enabled debit and credit card reader for brick and mortar retail purchases.[42] The company has since released additional technology for brick and mortar retailers, including a point-of-sale system with a Dock and Retail Stand similar to that offered by Square, and a tappable chip card reader.[43]

On May 11, 2017, Shopify acquired Oberlo, which was one of the star applications on its own Shopify App Store. Oberlo connects Shopify merchants with suppliers who ship products directly to consumers, and was acquired for $15M.[44]

In September 2018, Shopify announced plans to locate thousands of employees in Toronto's King West neighborhood in 2022 as part of "The Well" complex, jointly owned by Allied Properties REIT and RioCan REIT.[45]

In October 2018, Shopify opened their first physical space in Los Angeles.[46] The space offered classes, a "genius bar" for companies that use Shopify software and workshops.[46]

Online cannabis sales in Ontario used Shopify's software when the drug was legalized in October 2018. Shopify's software will also be used for in-person cannabis sales in Ontario when it is legalized in 2019.[47][48]

In January 2019, Shopify announced the launch of Shopify Studios, a full-service television and film content and production house.[49]

On March 22, 2019, Shopify and email marketing platform Mailchimp ended an integration agreement over disputes involving customer privacy and data collection.[50]

In April 2019, Shopify announced an integration with Snapchat to allow Shopify merchants to buy and manage Snapchat Story ads directly on the Shopify platform. The company had previously secured similar integration partnerships with Facebook and Google.[51]

In May 2019, Shopify acquired Handshake, a business-to-business e-commerce platform for wholesale goods. The Handshake team was integrated into Shopify Plus, and Handshake founder and CEO Glen Coates was made Director of Product for Shopify Plus.[52]

In June 2019, Shopify announced that it would launch its own Fulfillment Network. The service promises to handle shipping logistics for merchants and will compete with an established leader, Amazon FBA. Shopify Fulfillment Network will at first be available to qualifying U.S. merchants in select states.[53]

On August 14, 2019, Shopify launched Shopify Chat, a new native chat function that allows merchants to have real-time conversations with customers visiting Shopify stores online.[54]

On September 9, 2019, Shopify announced the acquisition of 6 River Systems, a Massachusetts-based fulfillment solutions company. The acquisition was finalized in October resulting in a cash-and-share deal worth US$450 million.[55][56]

In 2020, the company announced new hires in Vancouver, Canada, and the effects of the COVID-19 pandemic contributed to lifting stock prices.[57][58] On February 21, 2020, Shopify announced it would join the Libra Association, the Facebook-led group aiming to create the Libra digital currency, to help build a new payment network.[59]

On March 11, 2020, Shopify announced it is going fully remote. Over 5000 employees will start working from home, in response to rapid spread of Coronavirus disease 2019.[60]

It was reported that Shopify's valuation would likely rise on the back of options it had in the company Affirm that was expecting to go public shortly.[61]

In November 2020, Shopify announced a partnership with Alipay to support merchants with cross-border payments.[62]

As a result of Affirm's January 13 initial public offering (IPO), Shopify's 8% stake in Affirm is worth $2 billion.[63]

Criticism

In 2017, the #DeleteShopify hashtag campaign called for a boycott of Shopify for allowing Breitbart News to host a shop on its platform.[64][65][66] Shopify's CEO, Tobias Lütke, responded to the criticism,[67] saying "refusing to do business with the site would constitute a violation of free speech".[68][69]

In October 2017, Citron Research founder, short-seller Andrew Left released a detailed report which described the e-commerce platform as a "get-rich-quick" scheme in contravention of Federal Trade Commission regulations.[70][71] The day the report was released, the stock plunged more than 11%.[72] The main question he posed was "Outside the roughly 50,000 verifiable merchants working with Shopify, who are the other 450,000 the company says it has?" Third-party marketing tactics were expected to be improved.[73] Left was quoted in 2019 by The Street as saying about Shopify "I still think they are best in class".[74][75]

In January 2021 online stores, such as TrumpStore.com, who are run by the Trump Organization and Trump campaign were taken offline in response to riot at the U.S. Capitol.[76][77][78]

Data breach

In September 2020, Shopify confirmed a data breach in which customer data from fewer than 200 merchants was stolen. One of those merchants later said over 4,900 of their customers alone had had their information accessed. Shopify claims that the data stolen included names, addresses and order details, but not "complete payment card numbers or other sensitive personal or financial information." The company also claims that no evidence has proven that the data has been utilized. Shopify identified two "rogue members" of its support team to be responsible. The employees in question have been fired and the matter has been forwarded to the FBI.[79]

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