Two unicorns, Canadian ecommerce giant Shopify and Israeli ecommerce marketing startup Yotpo, have signed a multi-year platform partnership, with Shopify also making a strategic investment in the company.
Yotpo announced September 9 that the strategic investment from Shopify would help accelerate Yotpo’s growth and product development. Shopify currently uses five of Yotpo’s products.
Although the amount of the investment was not disclosed, the Israli publication Globes reported that Shopify is investing $30 million into Yotpo. It’s unclear whether the investment was in American or Canadian dollars.
“Yotpo is one of the most impactful partners in our ecosystem & their apps are used by hundreds of thousands of merchants.”
“Thrilled to share our strategic investment and long term partnership with @Yotpo,” Brandon Chu, Shopify’s VP of product acceleration, Tweeted. “Yotpo is one of the most impactful partners in our ecosystem & their apps are used by hundreds of thousands of merchants on Shopify.”
The partnership is meant to position Yotpo as one of the early launch partners for new Shopify development features. In this role, Yotpo aspires to develop first-to-market technologies that will help merchants of all sizes stand out in a competitive landscape.
The two companies will work to develop shopping experiences that are seamlessly connected and improve the one-to-one relationship between merchants and their customers.
The announcement described Yotpo as “one of the greatest success stories of the Shopify Ecosystem, a community of developers and partners who make apps that support more than 1.7 million merchants.”
Yotpo is just the latest Shopify investment as the Ottawa-based company races to bulk up its ecosystem with both funds and acquisitions. In July, Shopify, along with CRV and Renegade Partners led a $65-million Series B round, investing in Loop, an American startup offering an exchange-first returns platform for Shopify brands.
Shopify’s strategy includes putting capital into companies that support Shopify’s merchant ecosystem, like Tapcart and Swyft.
This year alone, Shopify has also made investments in Pipe, Bench, and Co-op commerce. The company has also taken stakes in Stripe and ‘buy now-pay later’ (BNPL) retail FinTech company Affirm, both companies Shopify partners with. Affirm went public earlier this year in a $1.2 billion initial public offering (IPO), giving Shopify a nearly $2 billion windfall, and Shopify’s investment in Stripe is reported to be around $350 million.
Shopify also recently acquired the team behind Primer, an Oakland-based augmented reality home design app. The deal marked the first publicly announced acquisition from Shopify since it acquired three companies in 2019, across a span of six months.
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The strategy has paid off. In July, Shopify announced its first-ever $1 billion revenue quarter, and in August the company said it was expanding its partnership with TikTok, allowing consumers to browse and discover products from Shopify merchants directly through TikTok’s app.
Even as Shopify has drawn more partners into its ecosystem, the e-commerce platform has experienced a stream of executives leaving the company in recent months. The most recent departure was Janeen Speer, Shopify’s former vice president of talent, who accepted a position as chief people officer at Calgary-based Benevity Inc.
Loren Padelford, general manager of revenue and vice president of Shopify Plus, announced he was departing the company in June.
Other departures in 2021 have included Shopify’s managing director of United States West, Lynsey Thornton, who left after an eight-year tenure at the company. In April, three major executives left, including chief talent officer Brittany Forsyth, chief legal officer Joe Frasca, and chief technology officer Jean-Michel Lemieux.
Shopify makes use of Yotpo’s marketing services such as SMS marketing, loyalty, referrals, reviews, and Visual UGC (visual user-generated content). The latter combines merchant’s customer reviews, photos, and videos in displays.
The company is also a partner with Facebook, which uses Yotpo’s Visual UCG in Facebook ads and to help drive traffic to merchant’s websites.
Mutual customers for Yotpo and Shopify include Steve Madden, Princess Polly, Brooklinen, ThirdLove, UNTUCKit, Chubbies, Sol de Janeiro, Alkaline Herb Shop and Parks Project.
Engineers Tomer Tagrin and Omri Cohen founded Yotpo in 2011. Since then the company has grown to over 550 people with $384 million in funding.
The Calcalist reported that Yotpo is valued at $1.4 billion, and is preparing to go public on the Nasdaq. Calcalist said Yotpo is aiming to raise $400 to $500 million with its IPO, which is set for the beginning of 2022.
