Lightspeed POS Inc. once called itself a “leading provider of point-of-sale software for independent restaurants” in the first press release it issued after a blockbuster initial public offering in 2019.
The Montreal-based technology company is a lot more than that now, reflected by a monster year in 2020 when its market capitalization on the Toronto Stock Exchange eclipsed more famous Canadian names such as BRP Inc., Ivanhoe Mines Ltd. and Air Canada.
The company, which quickly adapted its restaurant-centric software in order to also cater to smaller retail operations, now bills itself as a “leading provider of cloud-based, omni-channel commerce platforms,” a more accurate description of founder and chief executive Dax Dasilva’s ambition, which was always bigger than merely servicing restaurants.
We're early in this journey. There's lots to do in the world for us
Dasilva’s strategy has been to constantly innovate while quickly adding customers by acquisition and organic growth. Lightspeed ended 2020 on a buying spree, snapping up two American rivals, and it’s beginning 2021 by expanding on what the company has to offer.
On Jan. 12, it announced that some of its customers will be able to interact with suppliers in a manner similar to ordering takeout on delivery apps such as Skip the Dishes and Uber Eats.
It’s the kind of technology that retail behemoths such as Walmart Inc. have at their disposal to manage their supply chains. Dasilva is betting that the smaller independent sellers he targets will be attracted to a service that will level the playing field with those giants.
“This is a major building block of our strategy,” he said in an interview. “It’s a major competitive differentiator for what you can do with our retail platform. Now, when you get our retail platform, you are automatically connected to this world of suppliers.”
Lightspeed is in the vanguard of digitally native companies poised to replace banks and miners as corporate champions. Shopify Inc., the Ottawa-based developer of e-commerce websites, did exactly that last year, supplanting Royal Bank of Canada as the biggest company on the S&P/TSX composite index by market capitalization.
These types of companies are leading the recovery, since the pandemic has accelerated the shift to digital commerce that they were built to exploit. There were still 640,000 fewer jobs in December than in February, but hiring in Statistics Canada’s “professional, scientific and technical services category,” which includes technology companies, was about five per cent higher, the agency reported on Jan. 8.
Dasilva said he is currently trying to fill about 200 positions, an indication of the demand that exists for what Lightspeed is offering.
“We’ve talked about the supplier piece for at least five years … this is the real beginnings of the platform,” he said. “You’re seeing the full picture of what we’re building, a compelling global champion for those (small and medium-sized businesses) that have supply-chain realities. We’re the company that knows what their workflows look like.”
There was a moment early in the pandemic when it looked like Lightspeed could be in trouble. Governments in Europe and North America ordered restaurants and non-essential shops to close or limit traffic in order to slow the spread of COVID-19. Lightspeed’s stock lost almost 70 per cent of its value between Feb. 1 and March 20, and Dasilva stopped providing guidance about where he thought sales were headed, because most of Lightspeed’s clients were vulnerable to lockdowns.
But the company was ready for some turbulence. It entered the recession with plenty of cash in the bank and it had a business plan that anticipated the market conditions retailers were suddenly forced to adapt to as a matter of survival.
Lightspeed started out selling software to ease payment processing at the cash register, but its platform also works for e-commerce, and can be adapted to facilitate curb-side pickup, pop-up shops or however else companies might try to generate sales despite mandated social distancing. Last year, the company went ahead with plans to deploy payments technology, joining Shopify in making a pivot toward financial services.
Dasilva, a Vancouver native who is of Goan heritage, has built a global company with footholds in Europe and Australia thanks to acquisitions. Towards the end of last year, with Lightspeed’s stock price up more than 200 per cent from its trough in March, Lightspeed spent about $1 billion buying two American rivals to secure a place in the world’s largest economy.
“We know there is going to be a huge shift to systems like Lightspeed from legacy, and that’s been accelerated by COVID, so we don’t want to miss out on that huge movement,” Dasilva said. “We want to catch as much of that as possible.”
Like so many other fast-growing technology companies, Lightspeed is losing money. However, Dasilva insists that his approach isn’t to grow at all costs. He’s ready to make more acquisitions, and acknowledged the company isn’t as active in Asia as he would like it to be. But the right buying opportunity will have to present itself, he said.
“We’re early in this journey,” he said. “There’s lots to do in the world for us.”
Copyright Postmedia Network Inc., 2021