Lightspeed to Acquire NuOrder and Ecwid for Close to $1B
It was a busy day for Lightspeed, the Montreal-based commerce platform that’s dual-listed on the New York Stock Exchange and the Toronto Stock Exchange. It has entered into definitive agreements to acquire NuOrder, the digital wholesale e-commerce platform, and Ecwid, a U.S.-based global e-commerce platform, for a combined consideration of about $925 million.
Lightspeed will acquire NuOrder for about $425 million, satisfied by way of payment on closing of about $212.5 million in cash and the issuance of subordinate voting shares in the capital of Lightspeed valued at about $212.5 million. The deal is expected to close during the quarter ended Sept. 30 after applicable regulatory approvals.
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NuOrder, founded in 2011, serves more than 3,000 brands and saw 100,000-plus retailers generate more than $11.5 billion in orders through its platform in the trailing 12-month period ended March 31. It achieved revenues of more than $20 million and grew at a rate exceeding 30 percent year-over-year during the same period.
Ecwid, which allows customers to create stand-alone businesses in minutes bringing e-commerce to the masses, serves more than 130,000 paying customers in 100-plus countries. In the period ended March 31, Ecwid generated revenues of over $20 million, growing at a rate of more than 50 percent year-over-year.
Lightspeed will acquire Ecwid for about $500 million, satisfied by way of payment on closing of about $175 million in cash and of Lightspeed shares valued at about $325 million. The deal, which is subject to customary closing conditions and post-closing working capital adjustment, is expected to close during the quarter ended Sept. 30, after applicate regulatory approvals.
Lightspeed, which was founded in 2005, is a one-stop commerce platform and serves retail, hospitality and golf businesses in more than 100 countries. It has teams across North America, Europe and Asia Pacific. The company helps merchants simplify, scale and provide exceptional customer experiences. Its cloud solution unifies online and physical operations, multichannel sales, expansion to new locations, global payments, financing and connection to supplier networks. It has a market capitalization of more than $11 billion.
“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,” said Dax Dasilva, founder and chief executive officer of Lightspeed. “As economics reopen and business creation accelerates, we hope to embolden entrepreneurs with the tools they need to simplify their operations and scale their ambitions.”
Once integrated, the combination of Lightspeed and Ecwid will help merchants reach shoppers wherever they are, whether on social media or on digital marketplaces.
The closing of the two acquisitions is not contingent on each other.
In a conference call Monday morning, Dasilva said, “We want our platforms to become indispensable to any one starting or running a business.…Vertical dominance not only helps us remain focused, but it also leads to greater financial success.” He said customers in his dominant verticals are more likely to adopt more of their services, such as payments and use more of their software stack.
JP Chauvet, president of Lightspeed, added that for a commerce platform to be successful, you can’t only focus on the merchant as customer. “We need to really think about everybody within the eco-system,” he said.
He said to go from an omnichannel P.O.S. platform to what they’re calling a “commerce platform,” they need to look at the entire network and create value to the entire chain from suppliers to merchants to consumers. That means connecting merchants not only to consumers on e-commerce sites and in their stores, but connecting with them through social media and marketplaces. He also said it’s important to feed back to the merchants much more information about the consumer, so they can adapt their offerings. In addition, it’s necessary to provide sell-through information and find out what’s selling in real-time so suppliers can readjust their manufacturing. “Finally, we’re very focused on the connection between suppliers and consumers,” Chauvet said.
He said they now have one of the largest distribution networks for suppliers. What they need to do is look at the data and identify for suppliers new stores and “become a distribution network for suppliers so they can expand their reach into new geographies.” He pointed out that these acquisitions enable Lightspeed to have “really strong network strategies between suppliers, merchants and consumers.” For this to work, they need concentration in geographies.
“NuOrder helps us advance the roadmap by three to five years,” Chauvet said. He said they’ll be able to grow much faster and gain traction. He said he doesn’t foresee it being too complicated for NuOrder to connect with Lightspeed. In addition, he said, “Ecwid is extremely easy to use. Ecwid will really enable to us to sell across all channels, across all social media and really accelerate our roadmap here.”
Chauvet said now that they have these “incredible technologies,” they can support the acceleration, and they’ll be focused on integrating these new technologies so their customers can benefit as soon as possible.
Ruslan Fazlyev, CEO of Ecwid, said, “The distinction between online and brick-and-mortar retail has disappeared. Lightspeed and Ecwid, two best-in-class platforms, will unite to truly empower businesses. By eliminating the barriers merchants face when selling online, we will only more rapidly achieve our common vision of democratizing retail for independent businesses worldwide and enrich the communities they serve.”
“At NuOrder, we have been on a journey to revolutionize retail by building a global network for brands and retailers. The coming together of Lightspeed and NuOrder accelerates that vision exponentially. The power of connected commerce comes to life now. We are thrilled to join forces with Lightspeed to unlock transformative value for brands and retailers globally. This represents an inflection point in the history of retail,” said NuOrder cofounders and co-CEOs Olivia Skuza and Heath Wells in a joint statement.
Together, Lightspeed and NuOrder aim to create a bridge between the merchant and supplier experience, simplifying product ordering for retailers and offering brands insight into how their products move. The acquisition will capitalize on the early success of the Lightspeed Supplier Network and accelerate the growth of Lightspeed’s financial services offerings, including Lighspeed Payments and Lightspeed Capital, while helping the company establish a global distribution network for leading brands, such as Canada Goose, Converse and Arc’teryx.
As reported, in March, NuOrder, which is based in Los Angeles, disclosed a $45 million funding round led by Natalie Massenet and Nick Brown of Imaginary Ventures and Brighton Park Capital. NuOrder has partnered with retailers such as Nordstrom, Saks Fifth Avenue and Bloomingdale’s to conduct all their buying and selling exclusively through NuOrder, and that infusion of capital was earmarked to support NuOrder’s continued growth and expansion plans within focus markets and to advance its goal of reinventing commerce, finance, payments and data between brands and retailers within the global multitrillion-dollar b-to-b marketplace.
In a telephone interview Monday afternoon, NuOrder’s Wells said, “As you know we raised a round of funding recently. You don’t raise a round of funding like $45 million just to go and sell a few months later. It has to be something special and this was truly special.”
He said Massenet is committed to staying close to both companies. “I’ll be honest, she was one of the key influences in this decision,” Wells said. “She’s so passionate about retail. She knew that if we stayed where we were, and if Lightspeed stayed where they were, and we never came together, there wouldn’t be this seamless flow from brands to retail and retail to customers.” He said Massenet will cash out, and it’s a mix of cash and stock. “They can continue rolling in and generate more value in the combined entity,” he said.
“When you think about what we were building, we were building a best-in-class digital catalogue for a brand, assortments for the retailer, the ordering component for brands and retail. But what we were missing was the point of sale at retail. We’ve known the team at Lightspeed for a long time, we got talking at the raise, and we’re just so squarely aligned, it was just a match made in heaven,” Wells added.
He said if they want to provide value to the customer base, both brand and retailer, “we can’t continue our mission siloed.”
One of the big problems at retail is you walk into a retail store and they’re out of stock. “Now they’ll be hooked into NuOrder, which has the inventory of the brand, and we’re going to be able to create automatic reorders. They’ll be able to send sell-through data back from the retailer to the brand, and now the brand can figure out where they should have some stock, or where they should pull back some stock,” he said.
Skuza said brands want to know as soon as they can what’s selling, which enables them to make key decisions around production and forecasting.
Wells said Lightspeed is the world’s largest point-of-sale company. They have 140,000 store locations, including both e-commerce and physical stores. Those retailers who are using Lightspeed today, when they have to refill an order, they have to leave their P.O.S. system and come into NuOrder to place an order. While it’s better than what it was with Excel spreadsheets, “we just feel those two systems should be integrated and aligned,” Wells said.
Skuza said there are a lot of industry customer alignments between the two companies. Lightspeed is very strong in apparel, footwear, outdoor and sports, and NuOrder is very strong in luxury apparel through to sports. “We know that our customer, which is often the brand, and the retailer who’s using our platform, many of them are using Lightspeed already,” Wells said.
Wells and Skuza will stay on as co-CEOs. “We’re still at the beginning of this journey, and we want to make sure we’re still driving this, and the have the opportunity to drive the strategy and help with the team that we have,” Skuza said. She said it will be a stand-alone business within Lightspeed. The NuOrder team of 220 people will stay in place. The acquisition will also allow them to expand the number of people.
As far as immediate priorities, Wells said providing sell-through data, a connected marketplace (to offer additional products based on real sell-data), and trade financing. Through NuOrder and Lightspeed’s centralized financing solution, brands will be able to get paid efficiently on invoice while retailers will get the time they need to sell products to support the invoice payments. The deal is also expected to enable retailers to drop shop to customers and drive sales as retailers will be able to route orders directly to customers.
NuOrder is in the process of growing its team in Europe, and Wells and Skuza relocated to London last December. “Lightspeed is a global business and we’re now unlocking additional offices, additional resources throughout Europe and other markets which we wouldn’t have had access to yet,” Skuza said.
Wells said New York and L.A. continue to be big hubs for the company, and they have head counts in such cities as Milan and Paris.
Asked about Informa not using NuOrder anymore, as reported, Wells said, “I think what we realized that was a really solid partnership and we learned a lot. It’s one of those things; we just had slightly different approaches and focuses. They were great at doing trade shows, and vice versa, and they want to be supportive of a digital environment, but they didn’t want to go to that next level.”
Morgan Stanley & Co. LLC served as exclusive financial adviser to Ecwid and RBC served as adviser to Lightspeed on the Ecwid transaction.
FOR MORE STORIES:
NuOrder Gets $45 Million in Funding From Brighton Park Capital and Imaginary Ventures
NuOrder Enters B-to-b Payments Market
Lightspeed Announces Global Retail Partnership With Google
Lightspeed Retailers Experienced Growth Four Times Faster Than the U.S. Industry Average
Lightspeed Launches Supplier Network
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