Tobias Lütke is a German Canada-based founder and CEO of Shopify, an e-commerce company headquartered in Ottawa, Ontario. Shopify is also the name of its proprietary e-commerce platform for online stores and retail point-of-sale systems.
Early life and education
Tobias Lütke was born in 1980 and grew up in Koblenz, Germany. When Lütke was six, his parents gave him a Schneider CPC, a German brand of the Amstrad CPC distributed by the Schneider Rundfunkwerke AG. By 11 or 12, Lütke began rewriting the code of the games he played and modifying the computer hardware. After tenth grade, Lütke dropped out of school when he was 17 and entered an apprenticeship program at the Koblenzer Carl-Benz-School to become a computer programmer. Lütke moved from Germany to Canada in 2002.
Early career
In 2004, Lütke launched an online snowboard shop called Snowdevil, from his garage with his partners, Daniel and Scott Lake. After looking around and dissatisfied with any of the e-commerce platforms that were currently available, Lütke, a programmer by trade, had decided to develop his own in Ruby on Rails. Soon after, the Snowdevil founders decided to shift their focus from snowboards to e-commerce and Shopify, the e-commerce platform, was born.
Shopify
In June 2004, after attempting to open Snowdevil, the founders Lütke, Weinand, and Lake co-founded Shopify, an e-commerce platform for online retail and stores point-of-sale systems. They launched the platform as Shopify in June 2006.
In June 2009, Shopify launched an App Store and an application programming interface (API) platform. The API lets developers create applications for Shopify online stores and then sell them on the Shopify App Store. Shopify launched on the Apple App Store a free mobile app in April 2010. The app allows Shopify store owners to view and run their stores from iOS mobile devices.
In 2010, Shopify began its Build-A-Business competition, in which participants build a business using its commerce platform. The winners of the contest get cash prizes and mentorship from entrepreneurs, such as Eric Ries, Richard Branson, and others. In 2010, the Ottawa Business Journal named Shopify as Ottawa’s Fastest Growing Company. In August 2013, the company declared the launch of Shopify Payments, which authorized retailers to allow credit cards without needing a third party payment gateway. The company also announced the launch of an iPad-centric point of sale system. It uses an iPad to accept payments from credit and debit cards.
By 2014, the platform hosted nearly 120,000 online retailers and was ranked as #7 in Deloitte’s Fast 500 of North America, as well as #3 in Deloitte’s Fast50 in Canada. Shopify made $105 million in revenue in 2014, twice as much as it made the previous year. On April 14, 2015, Shopify registered for an initial public offering (IPO) under the symbols “SH” and “SHOP” respectively, on the Toronto Stock Exchange and New York Stock Exchange. On May 21, 2015, Shopify went public and in its debut on the New York Stock Exchange, began trading at $28, more than 60 percent higher than its offering price of $17, with its IPO raising over $131 million.
In September 2015, Amazon declared to shut down its Amazon Webstore service for retailers, and had chosen Shopify as the favored migration provider; Shopify’s shares bounced over 20% upon the news. In November 2016, Shopify associated with Paystack which provided Nigerian online retailers to receive payments from customers globally. On November 22, 2016, Shopify launched a mobile app called Frenzy that enhances flash sales. In January 2017, Shopify announced an alliance with Amazon that would permit retailers to sell on Amazon from the Shopify stores. Shopify’s assets grew nearly 10% upon this announcement.
In April 2017, Shopify started a Bluetooth enabled debit and credit card reader for mortar and brick retail purchases. In September 2018, Shopify announced proposals to determine thousands of employees in Toronto’s King West neighborhood in 2022 as the role of the “The Well” complex, mutually owned by RioCan REIT and Allied Properties REIT.
Ontario’s online cannabis sales used Shopify’s software when the drug was legitimized in October 2018. Shopify’s software will also be used for Ontario’s in-person cannabis sales when it is legitimized in 2019. In January 2019, the company published the launch of Shopify Studios, a full-service television and film content and production house. On March 22, 2019, Shopify and MailChimp, an email marketing platform, ended an integration contract over disagreements involving data collection and customer privacy.
In April 2019, Shopify revealed integration with Snapchat to allow Shopify merchants to buy and manage Snapchat Story ads directly on the Shopify platform. The company had previously obtained similar incorporation partnerships with Facebook and Google.
Funding rounds
In January 2007, Shopify raised $250,000 from angel investor John Phillips of Klister Credit, valuing the company at $3 million. In December 2010, Shopify raised $7 million in a series A round, led by investors FirstMark and Bessemer Venture Partners, with the participation from Felicis Ventures. In October 2011, Shopify raised $15 million in a Series B round from existing investors FirstMark, Felicis Ventures, and Bessemer Venture Partners. Georgian Partners has also participated in this round.
In December 2013, Shopify received $100 million in a Series C funding from existing investors Georgian Partners, FirstMark, Felicis Ventures, and Bessemer Venture Partners. Other investors include OMERS Ventures and Insight Partners also joined this round. This round also values the company at $1 billion.
Acquisitions
In February 2012, Shopify obtained Select Start Studios Inc., a mobile software developer, together with 20 of the company’s mobile designers and engineers. In August 2013, the company acquired Jet Cooper, a design studio based in Toronto. Shopify acquired Boltmade in October 2016. In December 2016, Shopify obtained Tiny Hearts, a mobile product development studio based in Toronto. The Tiny Hearts building has been converted into a Shopify development and research office. In May 2019, Shopify acquired Handshake. Its founder and CEO Glen Coates was made Director of Product for Shopify Plus, and the Handshake team was integrated into Shopify Plus.
Net worth
Lütke has a net worth of approximately $1.2 billion as of March 2018.