In the great debate over IPOs — has the time to come to market peaked? — one FinTech firm has been watching the landscape even as its rival, Square, will be jumping into the pool as early as this month.
As Re/code reported Thursday (Nov. 5), ShopKeep, which makes software geared to the payments industry, has been looking at an IPO, but it could take a couple of years. Chief Executive Officer Norm Merritt told the site that there’s a strategy in place that may take the company toward a public issue after building its C-suite of executives.
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“We’re the anti-Square,” he told Re/code. For one thing, the business model is a bit different. There’s a subscription model in place. The subscription model charges $49 a month per “digital cash register” that can help track inventory and other financial functions. The company has said it takes less than a year to break even on the investment of coming on board with the software. There are 20,000 customers in place.
In reference to the executive team that is being built, the company has seen a few new hires. Among them is Michael DeSimone, who joined as chief operating officer and had been the CEO of Borderfree, which did indeed go public. ShopKeep also brought on a chief financial officer, John Baule, who helped take two firms to market, including ChannelAdvisor. The subscription model is not the only revenue generator, as ShopKeep also bought a payment processor, which means it is able to generate revenue from transaction fees, too, though lower margins are tied to this business than is seen with the subscription segment.
The firm traces its genesis to 2008 and since then has raised roughly $100 million across a series of venture capital firms, including Activant Capital and Canaan Partners. The last funding round valued the company at about $200 million. Re/code reported that though the company says it is unprofitable at present, it anticipates doubling revenue again in 2016.
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