“We’re just getting started”.
Those are the words of Lightspeed CEO Dax Dasilva speaking with MTLinTech about his company’s latest acquisition, a leading German company in cloud-based POS hospitality software called Gastrofix. This is already Lightspeed’s fourth acquisition since their IPO back in March of last year. Which itself came on the heels of a massive round of venture capital funding.
But it wasn’t an overnight success. For those unfamiliar with Lightspeed, this is a company that was founded in Montreal 15 years ago and went through a 7-year bootstrapping period, followed by another 7 years of raising venture capital before their IPO. All in an effort to position the company to be able to consolidate the markets which it serves on a global level, which Dasilva says are highly fractured.
Going out and allowing restaurants or other small retailers to become data driven businesses on a global scale is Dasilva’s mission these days. And while his company had a strong presence in Europe already, he explains that by buying Gastrofix, now Lightspeed has better access to the larger European markets, and Germany in particular. “In the summer we announced the acquisition of iKentoo, which gave us access to Switzerland and France, but we still needed to bring Germany into our strategy. We’ve been talking to Gastrofix since the summer. So we knew there were class leaders in some of these markets. But we think they can do much more when they’re part of the Lightspeed family.”
The exact terms of the deal can be found in the company’s press release. Overall the deal is worth about USD 112 million, with about $60 million in cash, $40 million in equity and roughly $10 million future earnouts available as well.
On top of purchasing Montreal’s own Chronogolf in 2019, Lightspeed also went out and acquired the Australian company Kounta, which has a customer base down under and in Asia. A signal that Dasilva won’t settle for market dominance on only two continents. He points out that the markets his company is targeting are very fragmented all around the world.
“Our investors have agreed with us that there needs to be a consolidation. A lot of these companies are sub-scale and would be better off as part of the Lightspeed story. The execution of that has been well received by investors. They understand that there needs to be a go-to player globally for complex small business. We think Lightspeed should be that name, and investors have been buying into that story. And we’ve been able, quarter after quarter, prove our progress against that strategy.”
Dasilva tells MTLinTech that the timing is right for Lightspeed globally, as small businesses worldwide transition from legacy systems to cloud systems as their needs for leveraging data to enhance customer experience increases. Furthermore, many jurisdictions around the world have begun legislating the digitization of commercial transactions for the purposes of collecting taxes. This type of legislation is always an excellent driver of adoption of new technologies, such as those provided by Lightspeed. And, coincidentally, Germany will be adopting this type of legislation later this year.