Shopify's (SHOP) Plus To Benefit From Boltmade Acquisition
Zacks Investment Research | Oct 03, 2016 09:36PM ET
Shopify Inc. (NYSE:SHOP) recently reinforced its software development team through the acquisition of Boltmade. Based in Waterloo, Ontario, the product design and development consultancy boasts a healthy clientele that includes start-ups as well as Fortune 500 companies.
Post acquisition, all 21 employees of Boltmade will be retained by Shopify, which will increase its workforce to 130. The takeover will help the cloud-based multi-channel commerce platform to rapidly develop its Shopify Plus product offering in the near term.
While the legacy Shopify platform caters to small and medium-sized businesses, Shopify Plus is primarily intended for large retailers. The higher-priced product line caters to merchants with higher-volume sales and offers additional functionality, scalability and support requirements.
Shopify Plus Grows on Merchant Expansion
Shopify Plus had more than 1000 merchants at the end of 2015. The addition of Boltmade is expected to improve the features of Shopify Plus. This will further attract new merchants. We believe the addition of brands like Boeing (NYSE:BA), Bose and Hallmark will drive gross merchandise value (GMV) going ahead.
Notably, almost half of the new Shopify Plus merchants in the second quarter 2016 were clients that upgraded from lower price lines. This significantly drove the subscription revenue per merchant in the quarter. We believe the expanding Shopify Plus merchant base will drive the company’s top-line growth in the long haul.
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