What happened: E-commerce platform provider Shopify has expanded its popular financing solution from the US to the UK and Germany. The product has not been formally announced yet, but details are available on the local Shopify pages (Shopify UK; Shopify Germany). Shopify partners with YouLend in the UK and Germany.
My comment: Didn’t I mention that Embedded Lending is on fire in the last newsletter edition? I am not going to say that Shopify was the first company to offer an Embedded Lending product, but it’s easily one of the top global players in this space. I always remember an interview with Shopify’s VP of Merchant Services, Kaz Nejatian (now Shopify’s COO), from a few years ago, in which he described how Shopify had never wanted to get into lending. Still, they realised it’s the most often mentioned reason by the majority of their clients that they are not growing faster (I cannot link the article as the publication was liquidated and taken offline). Shopify does not list revenues from Shopify Capital directly and adds all Embedded Finance activities into the Merchant Services category. But the numbers they report are astonishing: By the end of 2022, Shopify Capital had funded $4.7 billion in cumulative capital since its launch in 2016. And in Q4 2022 alone, Shopify Capital funded $392.2 million, a 21% increase from the prior year (Shopify).
In the US, Shopify partners with WebBank for Shopify Capital, which also serves as the banking partner for established brands like PayPal and Yamaha. For its European launch, Shopify selected YouLend, likely valuing their established presence and expertise in the UK and German markets.
And a big thank you to my subscriber, friend, and Shopify customer, Shivam Parikh, for bringing the product launch to my attention!
