WeCommerce closes $33.7 million bought deal financing to acquire more Shopify ecosystem companies

Victoria-based holding company WeCommerce has secured about $33.7 million in funding following the close of a previously announced bought deal financing.

WeCommerce issued 2.81 million class A common shares at a price of $12 per share, giving the firm around $33.7 million in gross proceeds. This total included 310,000 shares issued related to a partial exercise of an over-allotment option.

WeCommerce plans to use the net proceeds to fund strategic acquisitions and for working capital.

The British Columbian holding company, which aims to build, grow, acquire businesses that serve Shopify ecosystem, plans to use the net proceeds from the offering to fund strategic acquisitions and for working capital.
 

Founded in 2019, WeCommerce is owned and led by CEO Chris Sparling, who founded it alongside chairman Andrew Wilkinson. The pair are also co-founders and managing partners of Victoria-based venture capital firm Tiny Capital.

The holding company, which went public on TSX Venture Exchange (TSXV) in December through reverse takeover, focuses mainly on SaaS, digital goods and services businesses that build apps, themes, and run agencies that support Shopify merchants.

WeCommerce owns a family of companies and brands in the Shopify partner ecosystem, including Pixel Union, Out of the Sandbox, Yopify, SuppleApps, Rehash, Stamped, and Foursixty, which it acquired last month for an undisclosed amount.

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The company’s shares were offered on a bought deal basis by a syndicate of underwriters led by TD Securities and Canaccord Genuity Corp, Raymond James Ltd, and Stifel Nicolaus Canada. WeCommerce paid the underwriters a cash fee of six percent.

WeCommerce also previously announced that Tiny Capital and Freemark Partners Holding Company have entered into a private sale agreement with Ben Moore, CEO of WeCommerce subsidiary Pixel Union. Tiny and Freemark have agreed to purchase an aggregate of 41,667 shares at $12 per share. WeCommerce said this deal is expected to close in the coming days.

Last month, Shopify announced a series of changes to its developer ecosystem during Shopify Unite. The changes included a significant adjustment to its developer revenue share model as part of the company’s aim to become more developer-friendly.

Under the new system, Shopify partners will pay zero commission on their first $1 million in annual revenue on Shopify’s App and Theme stores, followed by 15 percent thereafter. This is a big departure from the 20 percent commission on all revenue Shopify previously charged.

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These changes, which are set to be implemented as of August 1, are poised to benefit WeCommerce’s portfolio. WeCommerce referred to Shopify’s changes as a signal “it’s time to build (for ecommerce).”

“This new commission structure should result in lower prices and stronger margins for partners in the Shopify partner ecosystem,” wrote WeCommerce in a blog post following Shopify Unite. “Until recently, this ecosystem has been overlooked by many companies, investors and developers.”

In March, WeCommerce appointed Alex Persson as president who had joined WeCommerce in October, overseeing acquisitions and working closely with the firm’s executive team on strategic initiatives and portfolio company oversight. Persson brings over a decade of experience in acquisitions and investments with a focus on software to the role of president and interim CFO.

Feature image by by Roberto Cortese via Unsplash

Josh Scott

Josh Scott

Josh Scott is a BetaKit staff writer who loves to tell Canadian business and tech stories. His coverage is more complete than his moustache.