Global-e acquiring e-commerce provider Flow for $500 million
The acquisition is expected to strengthen the Israeli fintech company’s platform offering for emerging brands and is intended to further expand its capabilities and customer base in the segment
Global-e believes the acquisition will strengthen its offering and capabilities by providing it access to an additional addressable market of small merchants not currently eligible to use Global-e's services. The company is aiming to leverage Flow’s API-based technology to provide small merchants with a solution tailored for the needs of emerging brands, in combination with Global-e’s unique data models and AI-algorithms for conversion optimization.
Global-e will purchase flow in equal portions of cash and company shares, with a base consideration of approximately $425 million and up to approximately $75 million in potential additional consideration based on certain financial results in 2021, plus approximately $45 million in Global-e shares for certain assumed, performance-based vesting warrants for Flow shares. Flow is expected to generate approximately $20 million in net revenues in 2021. The transaction is expected to close during the first quarter of 2022.
“Our platform supports cross-border trade in a smart, simple and localized manner,” said Nir Debbi, President and co-founder of Global-e, whose market cap on Nasdaq rose to over $8.5 billion following the news. “This acquisition follows our strategy, ultimately allowing us to serve small and emerging brands in the most sophisticated and light-weight way possible, by utilizing Flow’s cutting edge technology coupled with Global-e’s best-in-class expertise and unique data models. The combination of Flow’s small merchant solution and our existing market-leading solution for large enterprise merchants, is expected to allow us to position our platform as a leading cross-border solution for any size of merchant, from self-served lightweight solutions for small and emerging brands, all the way to complex tailor-made enterprise solutions for the world’s largest brands.”
Global-e, which went public earlier this year, was founded in 2013 by three former Bank Hapoalim executives, Amir Schlachet, Shahar Tamari, and Nir Debbi, and its system - which operates in over 200 different markets around the world - enables the localization of purchases on online commercial sites, allowing them to be conducted in over 100 different currencies and 25 languages, and also coordinates delivery services. The company has over 500 customers in Europe and the U.S., among them brands such as Marks & Spencer, Hugo Boss, Marc Jacobs, and Harvey Nichols.
The acquisition is expected to allow Global-e to expand the scope of its exclusive relationship with Shopify to offer certain cross-border services to a broader set of merchants on the platform in addition to its current end-to-end 3rd-party solution catering to established brands. Concurrent with this expanded relationship, Global-e agreed to issue to Shopify a warrant for approximately $70 million in Global-e shares.
"We are delighted to be joining Global-e, the leading cross-border e-commerce platform for medium and large brands," said Rob Keve, co-founder and CEO of Flow. "Flow's technology powers dozens of emerging brands with a fast-to-deploy and easy-to-manage cross-border solution. As the cross-border e-commerce market continues to grow, we believe that Global-e is the ideal partner for us. We believe that joining forces with Global-e will enable us to further expand our platform and solution capabilities for our existing merchant partners, accelerate our reach into new brands worldwide, and help fuel our continued growth."