More consolidation underway in the area of point of sale services. New York-based payment startup ShopKeep is buying Ambur, a payments service for restaurants, food trucks and other food and drink establishments. ShopKeep will keep the product alive as it integrates it, and will be taking on Ambur’s 1,500 customers in the process.
The terms of the deal were not disclosed, and Norm Merritt, ShopKeep’s CEO, simply said, “It was a good deal for all parties.”
It comes amid a number of other developments in the payments industry. ShopKeep in July raised $60 million. Last week, one of ShopKeep’s competitors, Lightspeed POS, announced its own large raise of $61 million last week. Square is reportedly gearing up for an IPO in the next quarter. And First Data, itself also slated for an IPO, added open-source payments technology to its business through the acquisition of Spree Commerce. And there have been even larger signs of the increasing role that the tech industry is playing in payments, including the rise of Apple Pay, the spin off of PayPal from eBay and more.
Even with a lot of M&A underway, there are a number of startups in the market offering payment services — with nearly as many focusing specifically on food and drink retailers. This particular acquisition made sense, Merritt says, because Ambur was a particularly strong cultural fit for his company.
“Just as we were started by a shopkeeper, Ambur was started by two restauranteurs — Ansar Khan and James O’Leary — to solve what they saw as specific problems,” he said. ShopKeep actually already has its own restaurant product, but with fewer features than the full-service Ambur offering that covers front-end sales, back office business management and processing.
ShopKeep itself is among one of the bigger startups building the new generation of payment solutions for merchants that take advantage of the rise of smartphones and tablets; cloud computing; and user dissatisfaction with older, expensive systems that have less functionality.
Similar to others in the space, ShopKeep doesn’t disclose actual revenues but says that they’ve grown 130% in the last year. The company charges $49 per month per register, with the average set up cost for one register (iPad + all additional hardware including an EMV/ApplePay reader) around $1,000 before any discounts.
The company is currently on track to process $6 billion in payments on its platform on an annualized basis from some 20,000 merchants, making it smaller than Square ($30 billion in 2014), and Shopify and LightSpeed POS (both at $10 billion processed on an annualised basis).
With its $60 million of funding in hand, ShopKeep has been on a mini buying spree this year to grow its business to the next level to compete more with the bigger players. That has included buying Payment Revolution to add payment processing to is platform, and Merritt says there will be others to come. “There will be more consolidation,” he predicts. “The players that have the infrastructure to serve merchants in the long haul are the ones who will lead it.”
As for what areas that might touch, he notes that e-commerce has not been as much of an emphasis for ShopKeep in the past, but the trend for omnicommerce — where people have seamless experiences of discovering, buying and selling goods and services wherever the buyer may be — is definitely a strong one that ShopKeep will be looking to be more active in going forward. It’s also currently talking to a number of third parties also for partnerships to develop this area. Existing payment partners include Heartland and MasterCard.
The company also recently appointed a new CMO, Andrew Gorrin, who had previously been an executive at American Express and Web.com.