Mobile app developer an easy buy for Shopify

Internet retailing company picks up specialist to extend products to cellphones, tablets

Shopify is embracing the world of mobile communications.

The Ottawa company said Wednesday it has acquired application developer Select Start Studios Inc. to broaden its signature range of products that allow people to quickly and easily set up shops on the Internet. Terms of the deal were not disclosed.

The acquisition will allow Shopify to immediately begin making its products more accessible to clients trying to manage their online stores or buy product from Shopify clients over a cellular phone or tablet computer.
Select Start Studios, based in Ottawa and also known as S3, employs 16 and is well known for its mobile work. The company has developed iPhone apps for global accounting giant PricewaterhouseCoopers, phone listing provider Yellow Pages, telecommunications firm Avaya and others.

Its workforce will be rolled into Shopify's, bringing the company's employee count to 100. Shopify had 50 employees at the start of 2011.

Shopify has released apps for phones in the past, but until now has never had a team dedicated to making all of its offerings available to users of mobile devices, its founder and chief executive said in an interview.
"After seeing a massive increase in mobile transactions at Shopify, we believe there is great demand and opportunity for (mobile) commerce," Tobias Lütke added. "The S3 acquisition brings in top talent that will rapidly deliver on our mobile strategy, and produce several new mobile product offerings this year."
Lütke also used the announcement to praise the depth of talent available in Ottawa. He said his firm went looking to acquire a highly skilled mobile app development team and found one a stone's throw away from Shopify's downtown head office.

"These guys are at the top of their game and know this stuff better than anyone," he said. "We've been saying for a while that Ottawa is a fantastic place for starting technology companies. This just confirms it."
Lütke said S3 will complete any work it has taken on for clients and then work only on Shopify-related products. He said the move is aimed at keeping his whole team focused on making Shopify the best online retailing platform in the world.

Shopify's main competitor is online retailing giant Amazon. Amazon allows people to sell product through its websites, Amazon.ca and Amazon.com.

Shopify is different because it allows people to set up their own sites and then provides them with the website design and other tools they need to begin selling products on the Internet. Shopify removes the technical barrier faced by many of their clients wanting to create an online store.

Its products have become increasingly popular as more people turn to the Internet to sell their wares.
Shopify is privately held and does not have to reveal financial information. It says it has more than 20,000 clients around the world, from individuals to such well-known companies as General Electric and Pixar. Stores operated by those clients accepted more than four million orders last year, totalling $275 million in sales. The amount almost doubled the $140 million in sales Shopify retailers reported in 2010.

The Ottawa company makes its money either through subscription fees or by billing stores that use its services based on a share of sales that can be as little as two per cent.

To accommodate its growth, Shopify will be moving from its By-Ward Market offices into a nearby building on the second floor of 126 York St.

Shopify has also taken over 128 York St., the former location of the Capital City Music Hall, which the company plans to turn into a staff lounge.

The new facilities will give Shopify three times its current office space and prepare the company for future expansion.

In 2011 Shopify collected more than $15 million in venture capital investment, leaving the firm "well capitalized," according to Lütke. He said other acquisitions are likely in coming months.

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