Shopify has filed an F-1 document, indicating that it will sell shares to the public market. The company indicates in the filing that it will raise $100 million in its IPO. However, that figure is often given by companies as a place holder. Shopify has raised $122 million to date.
The company has posted quickly growing revenues, and declining losses in its most recent quarter. Shopify provides subscription ecommerce products to small and medium-sized business, and also offers support to customers who choose it. Its revenue is majority-derived from its subscription incomes.
At the time of its last capital raise, Shopify was valued at $1 billion, something that TechCrunch noted is nearly unheard of for a Canada-based technology startup. At that time, we reported that Shopify was diversifying into offline commerce.
During the first three months of 2015, Shopify posted revenue of $37.34 million, from which the company earned a negative $4.53 million — calculated using normal accounting methods. Those figures are both heading in the right direction: During the first quarter of 2014, Shopify lost $6.36 million on revenue of $18.81 million.
A company that is seeing its net loss slip in the face of rapid revenue growth? Hold me, I’m fainting.
A company that is seeing its net loss slip in the face of rapid revenue growth? Hold me, I’m fainting. The company has full-year, 2014 revenue of $105.01 million, on which it lost $22.31 million on a net basis. Shopify has a strong balance sheet of just under $60 million. Other firms that have filed to go public have had more, of course, but compared to its implied net cash burn per quarter, its lack of any long-term debt, and its incoming IPO dollars, the firm is on sure footing.
The company’s most recent round of private capital totaled $100 million. That sum, disbursed in the final weeks of 2013, implies again that the company will raise more in its IPO than the currently listed $100 million flat.
Do You Even MRR?
Even though Shopify is bucking the current IPO trends of going public while only half-dressed, the company is still all about that recurring revenue. Companies charging for software products, especially those delivered via the
cloud Internet, on a recurring basis is the new norm. That’s mostly because the method can be lucrative as hell, but also in part due to business, and especially its venture attendants, being decidedly lemming-like.
Holding all that steady, Shopify broke out its monthly recurring revenue, or MRR, in its S-1, arguing the following:
Our merchants typically enter into monthly subscription plans so we do not believe deferred revenue is an accurate indicator of future revenue. Instead, we believe Monthly Recurring Revenue, or MRR, is most closely correlated with the long-term value of our merchant relationships.
On that metric, the company has grown its MRR, using period-end figures, from $4.294 million in the year-ago quarter to $7.4 million in the first quarter of 2015.
More when Shopify prices.