Shopify increases investment in startups

There’s a popular investor for tech startups that serves many direct-to-consumer brands, and it’s not a traditional private equity or venture capital fund : Shopify .

Last week, Shopify announced an investment in Yotpo , a software-as-a-service startup that initially helped e-commerce companies manage and publish customer reviews but later expanded into other areas, such as text message marketing .

This isn’t the first startup Shopify has invested in ; it has disclosed at least six other investments this year, including Loop Returns , a startup that helps companies manage customer returns .

Shopify is gaining traction as an investor , and is no longer just a platform that helps startups build online stores . In recent years, Shopify has expanded into areas such as logistics and payments .

By investing in startups that provide services to its merchants, Shopify can work more closely with them to develop new features and services. In fact, this is exactly the purpose of investing in Yotpo . In the press release , the two companies also said that they have established a multi-year platform partnership, which will make Yotpo's product roadmap more closely aligned with Shopify .

Shopify is said to be making a lot of money from these investments , having made $2 billion from the IPO of buy now, pay later provider Affirm. Six months before Affirm went public, the company signed a deal with Shopify to become the exclusive buy now, pay later provider for its Shop Pay checkout app . As part of the deal, Shopify received an 8% stake in Affirm.

But investing in these startups also brings up a lot of thorny questions , starting with what it means for companies that compete with the startups that Shopify has invested in . Shopify won't develop all the features and services that an e-commerce business might need to run its website .

Instead, Shopify relies on an army of developers who build their businesses on Shopify and promote their apps to Shopify merchants through the Shopify App Store, which now includes more than 7,000 apps, including ones that help companies manage their loyalty or referral programs.

When asked about the company 's view on competitors of Shopify's investment startups, Shopify officials said the company will continue to support Yotpo's competitors. However , in theory , Shopify can also give Yotpo an advantage in other ways , such as giving Yotpo a more prominent position in the app store or making it the default option for Shopify merchants .

Shopify

Independent website