Lightspeed is reportedly up for sale, and buyers have come knocking.
What happened: A source told The Globe & Mail that Lightspeed has signed NDAs with several potential buyers. The interest seems to be coming from fellow payment and fintech companies seeking synergies and expansion, as opposed to private equity firms.
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A sale isn’t certain, but analysts have pointed to the likes of Clover, Intuit, Block, PayPal, and Shopify as potential buyers that would consider Lightspeed a good strategic fit.
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CEO Dax Dasilva is also reportedly open to giving up leadership as part of a deal.
- Though not confirming details of any potential sale, Lightspeed issued a statement saying it was undertaking a strategic review “with a view to realizing [the company’s] full potential.”
Catch-up: In February, then-CEO Jean Paul Chauvet said that it would take time for a strategic plan to bring in bigger customers and sell existing ones on more high-fee payment products to pay off. Impatient investors didn’t like the forecast, sending Lightspeed’s stock into a nosedive. Chauvet stepped aside, and co-founder Dasilva returned to the company.
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Though Lightspeed has since boosted its revenue and signed big partnerships with the likes of Uber, it also laid off roughly 10% of it over 2,000 staff.
- The company’s stock price has climbed since the news of a potential sale emerged, reaching its highest point since early February.
Why it matters: Lightspeed is a big company in payment tech, processing more than US$90 billion in transactions annually from over 165,000 customers. Any buyer would become a bigger force in the sector and get a leg up in their strategic plans, whether that be moving to more in-person payments, or picking up Lightspeed’s customer base in areas like hospitality.
Zoom out: A sale would also likely continue the trend of tech firms coming off of the TSX. Lightspeed went public in 2019, a precursor to a rush of tech IPOs in 2020, but nearly half of those have since delisted.