Dax Dasilva has big plans. The CEO of Montreal-based Lightspeed is overseeing simultaneous rapid expansions in Europe, Africa and Asia-Pacific.
It’s a tall order, but if he can pull it off, it’ll be the latest in a string of successes. Lightspeed’s stock has doubled since it went public in March, at which point 35 per cent of the firm’s revenue was coming from outside North America.
In an interview with The Logic, Lightspeed CEO Dax Dasilva discussed his global expansion plans, new business lines, building up his firm’s small patent portfolio and why he isn’t worried about his growing number of competitors.
The point-of-sale software company has recently bought three smaller firms, including Australia-based Kounta, which gives it access to the Asia-Pacific market, and Switzerland-based iKentoo, which gives Lightspeed a launchpad for 14 new countries across Europe and Africa.
It hasn’t all been good news. Lightspeed’s stock dropped in August after he sold some of his shares in the company, and dropped again following Monday’s announcement of the Kounta acquisition. But in a sit-down interview with The Logic last week, Dasilva talked about competing in a growing number of areas, including hospitality and golf, growing his firm’s small patent portfolio and why he isn’t concerned about either tech giants like Uber or domestic rivals like TouchBistro.
This interview has been edited for length and clarity.
Your stock has doubled since you went public. How will you keep it going in the right direction?
We’re super pleased with the market reaction. The reality is we’re at 51,000 customer locations. The total addressable market is 47 million potential customers. We’ve got this great growth strategy. Part of it is organic growth and part of it is to bring together best-in-breed, best-in-the-world companies. The goal is to be the go-to name for this segment.
You acquired iKentoo in July. How does that fit into the growth picture for Lightspeed?
IKentoo is in 14 countries in Europe and Africa where Lightspeed is not. Our strategy with these acquisitions is to try and expand into new regions and new business verticals, and this ticked a few of those boxes. The biggest new countries this gave us access to are France and Switzerland. Also, iKentoo is in the hospitality space, so it’s a great platform for us to start taking our other products in the retail space and start selling them in the hospitality space. And also to expand our data and payments strategy, as well as our point-of-sale strategy.
You’re looking to make more acquisitions?
We have a very robust pipeline.
You’ve always had a strong presence in Belgium and the Netherlands. France and Switzerland fit into that nicely. In Africa, are you also targeting French-speaking countries?
It’s South Africa. It’s countries where iKentoo has offices. We are really excited about integrating these countries. In Europe, there’s a big trend word, fiscalization, which means that the government wants businesses to create systems that can report transactions to the government. Our systems in Benelux are fiscalizing those countries, and now we will do the same for new countries. We just want to ride that momentum.
After Lightspeed’s IPO, a couple of other players in this space raised big rounds. TouchBistro, for example, brought in $158 million in new financing. How are you dealing with the new competition?
No single competitor is in more than five per cent of our deals. That’s how fragmented the space is. We overlap with some players in some verticals or some spaces, and then don’t see them at all in others. So I think the difference is that Lightspeed is in all of these countries and all of these verticals. We have the advantage of scale and have really great DNA for being a big international player.
In terms of international expansion, we’ve talked about Europe and Africa. You’ve also increased hiring in Australia recently. Is that a region of focus?
Yeah, we’ve had a small team there. All of those regions are places in the world where we’ll continue to announce expansions.
We’ve talked about country expansions. How about product expansions? Is that something that you’re looking for?
Yeah. A lot of it is led by what customers are asking for, or what solutions customers are coming to us for. More and more customers are wanting to find analytics, e-commerce, loyalty—all of these integrated seamlessly. When there are customers that want to scale vertically, they typically don’t have the expertise to stitch together solutions. So what we have in our product line is continually expanding.
For example, our acquisition of Chronogolf gave us an end-to-end solution for our golf customers. It allowed us to embed our retail product and our restaurant product, and added a layer specific to golf on top of that, with features like time management. That’s a great example of taking an acquisition and adding layers of functionality.
Is the goal to be a one-stop shop for these customers?
Some other large Canadian firms have recently made climate change announcements. Shopify has a new US$5-million sustainability fund. What’s Lightspeed doing?
We’re formalizing our corporate social responsibility platform. This has always been a part of the essence of Lightspeed: being environmentally conscious. For example, about 100 Lightspeeders joined the climate march with Greta Thunberg in Montreal.
With our buildings and our customers, we’re making a big effort to look at our own operations. But we’re also looking at how—because our products serve the consumer market—how they can actually be a positive influence. One of the initiatives that we’re piloting in the U.K. is a partnership with a company called Carbon Free Dining that adds a small amount to your receipt. We’ve planted—in partnership with Carbon Free Dining—300,000 trees just with a pilot of about 80 restaurants. Projects like this are things that you’ll see Lightspeed continue to invest in.
Uber recently acquired a grocery-delivery startup. Amazon has been pushing into the space. How is that affecting your business, the decrease in dining in, the rise of delivery apps and the tech giants’ push to carve out some of the restaurant space?
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Lightspeed enables businesses to be on the cloud, where they’re connected to services like delivery. It’s enabling these businesses that are brick and mortar to do these other models and add other revenue streams. The consumer market is changing. People’s shopping and dining habits are changing, and [so is] the way that they have goods and services delivered. Every year, it’s an evolving story.
Back in March, The Logic went through Lightspeed’s 200-page prospectus. One of the things that jumped out to me is Lightspeed has very few patents. A lot of tech companies do invest really heavily in a patent portfolio. Is that something you’re planning on changing?
That’s a strategy we will pursue. Trademark, copyright, patentable technology—I think we have very strong technology practices and you’ll be seeing more of that in the future.