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Related Headlines
| 09/09/2024 | PayPal to integrate w/ Shopify |
| 07/27/2023 | Shopify launches biz credit card |
| 05/06/2023 | Shopify Capital has huge first quarter |
| 02/08/2023 | Lendica integrates w/ Shopify, Salesforce |
| 09/08/2022 | Leadership shakeup at Shopify |
Stories
Shopify Capital Originates ~$3 Billion in Merchant Funding in 2024
February 11, 2025
Shopify Capital originated ~$3 billion worth of MCAs and business loans in 2024, up by 50% over the prior year. For the sake of comparison, online small business lender Enova originated $4 billion in 2024. Shopify is an e-commerce platform first, however, and is growing on all fronts
“2024 was a stand-out year for Shopify,” said Shopify President Harley Finkelstein. “We seized every opportunity to fuel our growth and it showed in the results quarter after quarter. Heading into 2025, we are committed to making entrepreneurship more common and further establishing Shopify as the go-to commerce platform for businesses of all sizes. With our proven track record, the agility of our platform, and our relentless focus on merchant success, we like our odds in this evolving technology landscape, and are excited about the opportunities it brings for Shopify and our merchants.”
Shopify Capital Originates $837M in Business Loans & MCAs in Q3
November 15, 2024Shopify Capital originated $837 million in business loans and merchant cash advances in Q3, putting the grand total at $2.1B for the first 3 quarters. During the earnings call, Shopify said that loss ratios remained within the consistent range.
Compared to some of their competitors in the online space, Shopify Capital ranks third:
Q3 originations:
Square Loans: $1.38B
Enova: $1B
Shopify Capita: $837M
Shopify Capital’s Funding Business Grows in Q2
August 14, 2024Shopify Capital originated ~$700M in business loans and merchant cash advances in Q2. During the earnings call, Shopify CFO Jeff Hoffmeister referred to its Capital division as a “growth business” that had increased in volume. Shopify has otherwise seemed to downplay mention of this division since early last year. In terms of origination volume, the company is still not as big as Enova or Square Loans.
Shopify’s rival, Amazon, used to offer funding to its clients directly as well, but switched to referring its clients to third party lenders earlier this year.
Shopify Capital MCA, Loan Origination Growth Appears to Slow Down
May 9, 2024Shopify Capital, the funding arm of Shopify that provides merchant cash advances and loans to merchants on its platform, experienced no increase in these related receivables in Q1 compared to Q4 2023. The company typically records significant growth in this figure each quarter. Shopify used to broadcast its origination figures far and wide in each quarterly earnings report and call but has since gotten shy about this segment of its business and no longer discloses originations. Instead, its balance sheet line item for “Loans and merchant cash advances” is virtually all there is to go by now and they were listed at $815M in Q1 vs $816M the prior quarter. This, of course, only reflects anything they’ve kept on balance sheet and could be a misleading indicator if those receivables are being sold off or taken on by a third party.
Shopify’s major rival, Amazon, never disclosed origination figures for its Amazon lending program, and in March announced that it was discontinuing its in-house lending program altogether after a 12-year run.
Shopify is still among the largest online small business lenders in the US.
Shopify Capital Renewal Rate Greater than 70%
February 13, 2024Shopify Capital’s funding business is continuing to gain momentum, according to the company’s latest quarterly earnings. Shopify stopped specifying precisely how much it is originating (perhaps because deBanked kept turning those numbers into posts every quarter for years) but still lists the receivables from its loans and merchant cash advances as a line item on its balance sheet. There the balance increased from $580M to $816 year-over-year.
“We know the capital product has been effective because we’re seeing a repeat renewal rate of over 70%, a testament to our ability to help merchants access the funding they need for growth, particularly ahead of key sale times, including the crucial Q4 holiday shopping season,” said Shopify President Harley Finkelstein during the call.
Originations Increased, Losses Decreased for Shopify Capital
November 2, 2023Shopify Capital is still experiencing an increase in business loan and merchant cash advance originations, according to the company’s latest Q3 earnings report. The company recently stopped disclosing precisely how much it is they are originating, however. It used to give precise numbers but starting this year Shopify now only cites its loans and merchant cash advance receivables balance.
“Transaction and loan losses decreased for the three months ended September 30, 2023 compared to the same period in 2022, primarily due to a decrease in losses related to Shopify Capital.”
So funding is up, losses are down, which is precisely the opposite situation that is going on at rival PayPal.
Shopify somewhat skimmed over its Shopify Capital business in its Q3 earnings announcements and on its official call except to state that it’s a strong segment that is growing.
Shopify Capital Continues to Gain Momentum
August 2, 2023Shopify Capital continues to gain momentum, according to the company’s most recent quarterly earnings call. Historically, the company has broadcast its precise business loan and merchant cash advance origination figures for each quarter but this time it held off from doing that. Instead, it emphasized that it had “$719 million in loans receivables and merchant cash advances outstanding on June 30, 2023.” As that figure came straight off the balance sheet, that could be compared to the $629M outstanding in the quarter before. So, receivables went up but originations was not disclosed.
Nevertheless, Shopify explained that Capital was among several business segments that were leading to some of highest cross-sell volumes they have ever achieved.
“The team is working tirelessly,” said Shopify President Harley Finkelstein. “They’re executing it really effectively.”
Shopify Capital’s Funding Volume Continues to Surge
May 6, 2023Shopify’s business lending and merchant cash advance division originated a whopping $477M in the first quarter of 2023. That’s up substantially from the $346.7M produced in the first quarter last year. Despite the continuous strong increase, Shopify Capital was not mentioned or even asked about during the company’s quarterly earnings call.
Shopify is a huge e-commerce business. The company generated $1.5B in revenue in Q1 and generated a net income of $68M.
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