Thread by @GetBenchmarkCo, 51% ECOMMERCE GROWTH You invested in $SHOP $SE $AMZN $BABA Looking for [...]

51% ECOMMERCE GROWTH

You invested in $SHOP $SE $AMZN $BABA

Looking for a new #eCommerce player going into the Gifts Season

Remember when $SHOP was at $ 40

Here is another

Canadian gem

Here is a SHORT thread

51% ECOMMERCE GROWTH You invested in $SHOP $SE $AMZN $BABA Looking for a new #eCommerce player going into the Gifts Season Remember when $SHOP was at $ 40 Here is another Canadian gem Here is a SHORT thread

$LSPD Lightspeed is a Point-Of-Sale (POS)

management system providing Payments

Accounting

Analytics

and Loyalty

solutions

It also provides the hardware

needed to accept payments

and manage a store, restaurant, sports facility

(bookings, inventory)

On top of that, it provides a website builder

(such as $SHOP ) that seamlessly integrates with the retailer’s SKUs, inventory

These are a lot of activities

Some questions before we dive deeper

Where did it all started

What is $LSPD Core Activity

$LSPD was founded in 2005 by Dax Dasilva in Montreal, QC

$LSPD provides an OMNI-CHANNEL (online

and offline

) platform for Small & Medium Businesses (SMB) that are retailers

or restaurants

$LSPD serves over 77.000 Customer Locations

in over 100 countries

Ok, understood

So it basically is another $SQ and $SHOP as they all

Provide a website builder for #eCommerce

Point-Of-Sale solutions

Well yes, but here is another view

$LSPD started right away with building a front-counter POS system

and back-office management system

for shops with a physical presence

Over the years

It added a sales analytics platform

loyalty

and accounting

solutions

It then added an #eCommerce

functionality to enable its customers to go online easily

$SHOP started by providing the tools needed to build an online business

This is a website builder

with extensive customisation

Plug-ins

Shipping options

and more

In 2013

it evolved towards the physical retail market with its own POS solutions

$SQ comes directly from the online payment space

It was one of the first to come with a POS system in the cloud

It then expanded into eCommerce with #Weebly

If you want to dive deeper in this comparison, make sure you visit

https://skyrocket.is/articles/lightspeed-vs-shopify-vs-square

LightSpeed vs. Shopify vs. Square - Article | Skyrocket.is

Ultimate comparison of the best online payment systems for your website. - The best payment systems for your website are compared in this showdown between Lightspeed, Shopify and Square. We compare...

https://skyrocket.is/articles/lightspeed-vs-shopify-vs-square

Why is this important

Well, if we want to understand $LSPD

We better know what it focussed on in the last 15 years

So $LSPD focusses on solving the SMBs problems

Why is this important Well, if we want to understand $LSPD We better know what it focussed on in the last 15 years So $LSPD focusses on solving the SMBs problems

Good right? If you run a shop or restaurant, just integrate with $LSPD and DONE

You can now seamlessly deal with your back-end

front-end

and payments problems

Good right? If you run a shop or restaurant, just integrate with $LSPD and DONE You can now seamlessly deal with your back-end front-end and payments problems

So the focus of $LSPD are the retailers

and restaurants

that qualify as SMBs

According to $LSPD there are 47 million shops that qualify as SMB retailers and restaurants

If each of these SMBs paid $LSPD $ 200 a month

It would represent a TAM of $ 113B

So the focus of $LSPD are the retailers and restaurants that qualify as SMBs According to $LSPD there are 47 million shops that qualify as SMB retailers and restaurants If each of these SMBs paid $LSPD $ 200 a month It would represent a TAM of $ 113B

In the U.S. only

There are 2.7m SMBs according to $SQ last earning presentation

  

Here is a full breakdown of the market

That’s a large market! What do $LSPD manage to capture?

Customer locations at 77.000 up from 51.000 YoY (51% growth)

Revenue at $ 36.2m up from $ 24.6m YoY (47% growth)

Gross Transaction Volume at $ 23B up from $ 15.6B YoY (47% growth)

$LSPD is quickly innovating in order to retain and win more customers

LightSpeed Capital will provide $ 50.000 per retail location to U.S. retailers (in partnership with #Stripe)

Hospitality POS now features improved delivery and pickup tools (integrates with #UberEats, Skip The Dishes and #DoorDash)

New customer engagement too in order to boost omni-channel loyalty

These new options enable SMB retailers and restaurant to survive

in the digital world

Here is what the CEO

Dax Dasilva has to say on the latest Lightspeed feature - “Order Ahead”

“As the pandemic continues to accelerate the digital transformation of the food service industry and consumers intend to make more takeout and delivery purchases, reaching diners outside restaurant walls has never been more important to ensuring long-term success.”

$LSPD enables small to medium retailers and restaurants to survive

Is that a viable strategy

Let’s find out

The Cloud Point-of-Sale market is expected to grow by a CAGR of 24.2% over the 2020 - 2025 period

Driven by

Increased penetration as across small businesses, around 64% of single-store retailers HAVE NOT adopted a POS system in 2019

Surge in demand for #eCommerce solutions that have now become inevitable for SMBs

These elements boost the adoption of POS to conduct sales, manage inventory and track online and offline sales

Some caution is required

The market for POS is fragmented across the world and crowded with local solutions

$SQ $SHOP $PYPL are behemoths making inroads / or being there first

Compared to smaller competitors $LSPD appears to be more widespread (e.g. 2 to 3 times the GTV of #VendHQ)

Few POS systems can boast the same “All In One” solution as $LSPD is offering

$SQ might be one of the few with a well-rounded counter offer

Compared to smaller competitors $LSPD appears to be more widespread (e.g. 2 to 3 times the GTV of #VendHQ) Few POS systems can boast the same “All In One” solution as $LSPD is offering $SQ might be one of the few with a well-rounded counter offer

Financials check

GMs of 64%

Down from 70% in previous years

Operating loss of $ 21m

OpEx as % of Sales at 117% up from 108% a year earlier

Cash flow from operating activities at negative $ 7.4m

Current assets of $ 203m vs current liabilities of $ 31m

THE BOTTOM LINE

The SMB first approach of $LSPD makes it an excellent target for the retailers and restaurant that still need to jump on the cloud POS wagon

$LSPD is growing steadily (51% in current Q and 70% in prev. Q) while adding features to compete with $SQ and $SHOP at the same time

$LSPD is taking a global approach as it is present in over 100 countries - More than some of its bigger competitors

Market is crowded with alternatives and need to look out for larger competitors entering $LSPD key markets (e.g. $PYPL purchasing iZettle)

$LSPD strong focus on SMB and all-in-one solutions makes it an attractive competitor to $SQ - We have started a small position

We will add to this position once #COVID clears away and more clarity comes on physical locations sales - on which $LSPD depends

$ESTC is on our watchlist

To Be Reviewed SOON

Please note that this is not a recommendation to buy - You are responsible for conducting your own research

Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.

Sources

✑ Investor presentation

✑ Company website

✑ TechCrunch

✑ Forbes

✑ Business Insider

✑ Cantechletter

✑ Mordor Intelligence

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