Lightspeed, a specialist in point-of-sale technology for retailers and restaurants, wants to be the “Montreal unicorn.”
A “unicorn” is a typically self-deprecating Canadian term for a tech startup that reaches a $1 billion market value. That kind of valuation is common in Silicon Valley; in the North, not so much. But Lightspeed says that it has what it takes to change the narrative when it comes to the Canadian innovation engine.
"Ottawa has Shopify, Vancouver has HootSuite. We think we are that for Montreal," said Lightspeed CEO Dax Dasilva, speaking to the Star Phoenix. He pointed out that Shopify, which is also a POS software company, saw its IPO raise a larger-than-expected sum of $131 million earlier in May.
"It was a huge day for Canadian tech. I think the realization that you don't have to build your company in Silicon Valley is such a big help for all of us that are trying to build big tech superstars in Canada," said Dasilva. "It tells us we're going in the right direction."
So how close is it to unicorn status? It has digs fit for a fantastical creature of myth and legend: It recently moved into the top floor of a 117-year-old château in Montreal, the Place Viger. But in terms of funding, Accel Partners led a $30-million investment round in 2012—and in September 2014, Lightspeed closed a $35-million investment round led by iNovia Capital (News - Alert). For now, it plans to remain private—but is expecting big growth ahead.
The company, which handles $9 in payment processing transactions annually for about 24,000 locations, recently celebrated its 10-year anniversary in March. It has seen hockey-growth of late, ballooning from 50 employees three years ago to 300 globally today.
It’s fortunes are about to get even better as the United States gears up for an October deadline to move to chip-and-PIN credit card technology. Chip-based payment cards, also known as smart cards, have an embedded microprocessor chip that contains the information needed to use the card for payment, and is protected by various security features, so they’re a more secure alternative to traditional magnetic stripe payment cards. Most of the world has moved to chip-and-PIN cards already, but the U.S. has been a stubborn holdout.
After October, by regulatory decree, the liability for fraudulent charges will shift from banks onto merchants if they don't adopt chip-and-PIN and the accompanying EMV standard. In an era of massive POS breaches like the high-profile incidents at Target (News - Alert) and Home Depot, the financial risk is significant—so merchants are willing to make the investment in the upgrade.
"We see this as an amazing opportunity, where you're going to have a very high demand for systems like ours, and we are the largest player in the market today, so we think this is going to fuel growth like crazy in the next couple years," chief revenue officer Jean-Paul Chauvet told the paper.
He added that Lightspeed is following up on a whopping 16,000 leads a month globally, with the U.S. a significant target beginning this summer. It will lead with an educational approach.
"It's complex for an independent retailer to understand what's happening," he said. "Through that education, we're going to bring them through understanding how Lightspeed can help them."
Edited by Rory J. Thompson