Shopify picks Berlin for first engineering hub outside Canada

Iain Sherriff-Scott/The Logic

Shopify has chosen Berlin as the site of its first engineering hub outside Canada, and is hiring a senior executive to lead a team adapting its e-commerce platform for European merchants.

As the Ottawa-based e-commerce company seeks to expand internationally, it’s adding engineers, developers and designers to an office in the German capital working to expand its merchant base on the continent and help localize its platform for European users. They will join more than a dozen new hires in the city and several employees who have moved there from other Shopify offices over the last year, according to LinkedIn data.

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Talking Point

Ottawa-based Shopify has chosen Berlin for its first engineering hub outside Canada, and is recruiting a senior executive to lead a team that will focus on European markets. The e-commerce giant has named Germany as one of the priority countries for its ambitious global growth plans, and it’s looking for more developers and designers to add to more than a dozen new hires over the last year.

Shopify is looking for a director to “build out Berlin as Shopify’s next global engineering hub (the first outside Canada!),” according to a job description posted last month. The new recruit will oversee the international division’s European technical team, building new products and features for local markets.

Shopify did not respond to multiple requests for comment, but following The Logic’s inquiries, the job posting for the role was modified to remove references to the creation of the company’s first engineering hub outside Canada.

“There’s a lot of good engineering talent [in Berlin],” said Roland Memisevic, the Toronto-based CEO of AI company Twenty Billion Neurons. “There’s a lot of startups there. It is a tech hub now.” Memisevic’s firm was founded four years ago with offices in both cities because a key executive lives in the German capital. He said Berlin’s cosmopolitan population and artsy culture draw in young people, which makes it a good place to find tech workers.

Shopify currently generates most of its revenue in North America; in 2018, merchants in the U.S. and Canada made up 77 per cent of its US$1.07 billion in sales. The company breaks out numbers for U.K. sales, which represented an additional 6.5 per cent, but not for the rest of Europe. It has made international growth a focus for the last two years, modifying its products for promising markets, seeking out local apps to integrate with its platform, and investing in staff and marketing in those countries.

In 2018, Shopify picked Germany as one of four priority countries, upping its commissions for developers that referred local merchants and launching a German-language version of the platform that May. And in September 2018, it started offering its Shopify Payments feature in the country, letting shoppers settle receipts via bank transfers, which are popular in the country. “This is special not just because Germany is the largest economy in the eurozone, but also because it marks our first local payment method,” chief operating officer Harley Finkelstein said on the company’s third-quarter conference call that year.

The company launched its first brand awareness campaigns in Germany and France in the third quarter of 2019. CEO Tobi Lütke also has personal ties to Germany, having grown up in the town of Koblenz before moving to Ottawa in 2002.

A growing number of Canadian firms are considering the German capital for their European offices, according to Berlin Partner für Wirtschaft und Technologie, an economic development agency. “Especially after the Brexit decision we noticed an increase in interest from companies in North America and Asia,” said spokesperson Lukas Breitenbach, adding that the city is an alternative for firms that “would otherwise have chosen to enter the European market via London.”

Breitenbach said the city is an attractive location for tech company satellite offices because it has several engineering-focused universities, a skilled talent pool and a relatively low cost of living.

Historically, Berlin “hasn’t been that expensive,” said Memisevic. “So you didn’t have to be Google or something in order to have a workforce there.” While rent and living expenses are both increasing, he said the cost of running a Berlin office is comparable to Toronto.

In addition to the new executive, Shopify is recruiting a talent sourcer to find more hires, as well as an engineer to work on projects like payment integrations, platform translations and compliance with European data-privacy regulations. It’s also looking for user experience and development staff.

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Over the last two years, the company has brought in tech team members from German firms like online retailer Zalando, digital bank N26, and HR software platform Loopline Systems, LinkedIn data shows. Shopify employees from its Ottawa headquarters and Toronto hub have moved to the city, as well. The Berlin office, which currently has at least 55 people, also houses staff focused on Italy, France and the broader Europe, Middle East and Africa region. There’s also a team working on Oberlo, a Lithuanian dropshipping app that Shopify acquired in April 2017.

Shopify has more than 4,000 employees, over 1,000 of whom work in Ottawa. Berlin isn’t Shopify’s only European location. It also has offices in London; Vilnius, site of Oberlo’s headquarters; and Stockholm, where its November 2018 acquisition Tictail was based.