Lightspeed’s Merchant Cash Advance Business is Accelerating

“Our capital business has grown—it’s doubled from over a year ago and we expect that trajectory to continue. And capital revenue comes in at a 95% gross margin,” said Lightspeed CFO Asha Bakshani in the company’s most recent quarterly earnings call.

Although Lightspeed is more widely known as a global e-commerce platform, analysts have been encouraging the company to ramp up its merchant cash advance business because of the considerable margins it produces. As such Lightspeed through Lightspeed Capital has been doing just that. And not just in the US. “We launched Lightspeed Capital in France, the Netherlands and Belgium this quarter, and Germany shortly after the quarter, expanding our global footprint for this high-margin offering,” said company CEO Jean Paul Chauvet.

Origination growth has been slow, however, because the company has been concerned with the potential impact it will have on its own available operating cash. This fear seems slightly overblown as Lightspeed reported having $750M in cash as of the close of the most recent quarter and said that merchant cash advance originations were responsible for using up only $8.3M in cash during the quarter.