E-commerce platform Shopify has quietly made an acquisition to continue its expansion of the services and products that merchants can sell and purchase through its platform. It has acquired Handshake, a New York startup that offers a commerce platform for businesses that sell wholesale goods.
Shopify has confirmed the deal in a short statement:
“Handshake is now a part of Shopify. We consider acquisitions in the normal course of business as we focus on making commerce better for everyone.” It hasn’t disclosed the value but a source tells us it was less than $100 million.
We also received an emailed tip that noted that the acquisition was announced to staff earlier this month, and that the team is operating as part of Shopify’s extended service tier, Shopify Plus, headed by David Moellenkamp. Indeed, Handshake’s profile on LinkedIn now indicates that it was acquired by Shopify, and Glen Coates, who had been the founder and CEO of Handshake, is now the director of product at Shopify Plus.
Handshake had raised about $23.5 million and was valued in its last round (in 2016 — note that it’s not this Handshake) at just under $54 million, according to PitchBook. Investors included Boldstart Ventures, Emergence Capital, SoftTech VC, Point Nine and others. (We’re trying to find out more on the price, and since Shopify is listed publicly now, it may disclose the price in a future earnings filing.)
The opportunity that Handshake had identified, and now Shopify is targeting, is the area of the e-commerce market where brands and other merchants sell items wholesale, potentially alongside retail efforts also focused on consumers.
This is big business: a recent report found that B2B e-commerce sales in the U.S. alone passed $1 trillion for the first time in 2018. As with consumer-focused sales, platforms like Handshake’s offer merchants the ability to handle these sales directly, rather than handing off the sales to third-party marketplaces, where the merchant also needs to pay a commission to the third party and need to play by its rules.
Handshake’s customers include the likes of Bugaboo, Williams-Sonoma and Roland.
This deal comes at an interesting time for Shopify.
Some weeks ago, we reported on how Mailchimp and Shopify had stopped working together, only to find out days later that Mailchimp had actually also quietly acquired an e-commerce startup to start to build out more purchasing tools of its own for its customers.
In that regard, this latest acquisition by Shopify underscores how it’s also growing and expanding its scope — albeit in a way that puts it into closer competition with the likes of Alibaba and Amazon, which themselves have carved out a strong place as B2B marketplaces.