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07/27/2023Shopify launches biz credit card
05/06/2023Shopify Capital has huge first quarter
02/08/2023Lendica integrates w/ Shopify, Salesforce
09/08/2022Leadership shakeup at Shopify
04/28/2021Shopify Capital Q1 funding soars


Shopify Capital Continues to Gain Momentum

August 2, 2023
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Shopify 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, 2023
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Shopify’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.

Shopify Capital Seeing “Incredibly Strong Renewals From Previous Borrowers”

February 16, 2023
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Shopify Capital originated $393.2M in MCAs and business loans in Q4, an increase of 21% YoY, the company revealed. The company also began funding small businesses in Australia last year, bringing the total countries it does business in to four.

“[Shopify] Capital has acted as a lifeline for merchants, especially through the pandemic and this tough macro environment, allowing them to conveniently access capital when they need it most,” said Shopify President Harley Finkelstein. “Capital is now available in four countries, and our machine-learning algorithms to underwrite merchants keeps getting better.”

Finkelstein also noted that the company is “seeing incredibly strong renewals from previous borrowers.”

The graphic below, illustrating the cumulative growth of Shopify Capital’s originations, was shown in the company’s Q4 earnings presentation:

Shopify Capital

Lendica Integrates with Shopify and Salesforce

February 7, 2023
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LendicaShopify and Salesforce users will now be able to access loan products through Lendica. Now, how does it work? Lendica gives their software to Independent Software Vendors (ISVs) and once installed, their customers will have access to Lendica’s funding products (PayLater, FundNow, and DrawDown).

PayLater is similar to how BNPL works, allowing vendors to delay their payments to a weekly basis. FundNow resembles an accounts receivable product where merchants can get paid up to 90 days ahead of the seller terms offered from their wholesale account. DrawDown is working capital that allows businesses to borrow against their future cash flow. These three products can be integrated into Shopify and Salesforce with an embedded funding or pay later button.

“We’re giving this tool to these ISVs so that their customers can instantly access our product and then learn about our other funding tools,” said Jared Shulman, CEO at Lendica.

“The most important piece, and this is kind of the excitement of Salesforce and Shopify is that what Lendica was doing is building this missing infrastructure in the small business lending space…,” said Shulman. “And what that is, is this standardized lending language, we call it the Lendica token that allows any financial institution to get a complete picture of a business, and then a point of reference on what that picture means.”

Lendica has experienced strong adoption of its products. According to Shulman, its PayLater product alone has garnered more than 10% growth month over month.

Shopify Funds $507.6M in Q3, Expands MCAs and Loans to Australia

October 27, 2022
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Shopify Capital originated $507.6M in merchant cash advances and loans in Q3, up from $416.4M in Q2. The increase was assisted in part by the company’s expansion into Australia, bringing the total countries that Shopify funds in to four (US, UK, Canada, AUS).

Shopify is the largest e-commerce platform after Amazon but the two companies are in the same ballpark when it comes to lending originations, and Shopify is potentially doing more.

Shopify generated total revenue of $1.4B in Q3.

“In Q3, we delivered another solid quarter of GMV, revenue, and gross profit dollar growth against the high inflationary environment,” said Amy Shapero, Shopify’s CFO. “From an operational perspective, we recalibrated our organizational structure, successfully rolled out a new compensation framework, and began integrating Deliverr into Shopify. Looking ahead, the flexibility of our platform, breadth of solutions, pace of innovation, and disciplined investment approach position Shopify well to realize the enormous opportunity ahead.”

Shopify Capital Originated $416.4M in MCAs and Loans in Q2

July 27, 2022
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shopify glyphShopify Capital originated $416.4M in funding to small businesses in Q2, the company announced. That was spread across the US, Canada, and the UK. The figure represented a large increase over the $346.7M in Q1.

Although its funding business grew, the overall parent company announced that it was laying off 10% of its employees. The CEO explained that this was a correction to its expectations that pandemic-driven e-commerce sales would continue to soar for a long time, but that they have instead slowed.

Shopify Capital Originated $346.7M in Business Funding in Q1

May 8, 2022
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shopify glyphShopify Capital originated $346.7M in MCAs and business loans in Q1, the company announced. That included merchants in the US, UK, and Canada. Though it was a 12% increase over the same period last year, the figure puts them virtually on par with originations in 2021 if the following three quarters hold steady.

Shopify was one of the only online lenders whose origination volume substantially increased during covid. Most experienced significant drops but have since dramatically recovered.

“The hundreds of thousands of businesses that shifted their business to Shopify during the pandemic and stayed with us since can now take advantage of our powerful retail point-of-sale offering for a unified view of their sales online and offline,” said Shopify CEO Harley Finkelstein during the Q1 earnings call. “Shopify has been developing the world’s best point-of-sale retail software for years, and it’s now at the point where all merchants who came to Shopify during the pandemic can leverage it.”

Shopify Capital Originated $324M in Funding in Q4

February 16, 2022
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shopify glyphShopify Capital originated $324M in Q4 2021, bringing the full-year total to $1.39B. That figure represents a massive increase over the company’s previous originations record of $794M in 2020.

During the quarterly earnings call, Shopify CFO Amy Shapero listed Shopify Capital among the divisions that drove revenue growth for the company in 2021.

“As merchants build momentum, inventory and marketing needs to grow alongside it,” said Shopify CEO Harley Finkelstein. “And this is where Shopify Capital comes in, offering merchants the funding they need to expand their business.”

Total originations came in just shy of the numbers that rival OnDeck reported a week earlier. OnDeck originated $1.76B in funding to small businesses in 2021.

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