Shopify: $15bn e-commerce platform

We see Shopify as a key enabler in the move towards direct-to-consumer ecommerce. Shopify has sustainable competitive advantages enabling adoption by both ‘retail like’ customers as well as enterprises.

Originally relevant for startups, today Shpify is expanding rapidly into the enterprise market. Shopify Plus (24% of recurring revenues) is likely to be a growth engine for next few years, as Shopify has just started penetrating the enterprise market. (Grew 70% yoy in the latest quarter.)

In the short term we are concerned about a  rapid slowdown in non-enterprise revenue growth, we believe this is because of a slowdown in dropshipping / ‘easy money’ startups. This is likely to impact the business for the next two quarters, also during this period we should have data to answer difficult questions on churn. 

Link to Research