Shopify Acquires Swedish Competitor Tictail; LA Retail Location Leaves Analyst Bullish

Shopify Inc (NASDAQ: SHOP) shares were surging Monday after news broke that the company acquired Tictail, an e-commerce platform focused on smaller brands.

Raymond James analyst Brian Peterson said that while no financial details for the transaction were disclosed, Stockholm-based Tictail has secured $32 million in funding.

“Similar to Shopify, Tictail has simplified the digital commerce process for small brands and entrepreneurs, with the ability to create a store from a mobile app while also providing a marketplace for brands on the platform,” Peterson said in a Friday note. 

The analyst views the acquisition positively and said it aligns with Shopify’s goal of enabling entrepreneurs while also providing a potential catalyst for growth internationally.

Tictail has approximately 80,000 to 125,000 brands on its platform. 

Guggenheim Stays Bullish After LA Visit 

Guggenheim analyst Ken Wong reiterated a Buy rating on Shopify after visiting the company’s first permanent retail space in Los Angeles.

Wong said he left his meeting convinced that the physical presence in Los Angeles will help generate merchant adds, drive GMV growth and improve retention.

Sales are rarely made on first visits, but overall conversions have been better than anticipated and the site has helped frustrated merchants from competitors Wix.com Ltd (NASDAQ: WIX), Squarespace and BigCommerce migrate onto Shopify’s platform.

“Management has talked up investments in brand marketing and we view the LA location as a strategic approach to killing two birds with one stone,” the analyst said. 

If Shopify’s LA location proves successful, New York would be the next logical city to open a customer center, according to Guggenheim. 

Shopify shares were up 5.44 percent at $142.03 at the time of publication Monday. 

Related Links:

Shopify Merchant Feedback Paints Bullish Picture For Q2, Roth Capital Says In Earnings Preview

Citron Blasts Shopify, Says Changes To Facebook Data Will ‘Annihilate’ Company’s Entrepreneurs

Public domain photo via Wikimedia.