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#64 – Shopify’s big crypto play, Dropbox enters e-commerce & India’s new super app

by | Apr 11, 2022 | Recent Newsletters

I've got a crazy amount of Shopify news for you this week. Looks like I'm going back to my roots. 

Most of you don't know this because you subscribed after the pivot, but Shopifreaks started out as an exclusively Shopify-focused newsletter. I changed course in May 2021 to focus on broader e-commerce news and haven't looked back. (I love the new direction.) However this week, the attention is back on Shopify… some good… some, well…

However keep reading past the Shopify news because I also report on an extremely well funded checkout platform closing for business, a new Indian super app hitting the market with a rocky launch, and Dropbox getting into the e-commerce game. 

Plus learn which apps teens prefer and how this affects the future of e-commerce and fintech. 

All this and more in this week's 64th Edition of the Shopifreaks newsletter. Thanks for being a subscriber. 

Stat of the Week

Cross-border transactions will account for 38% of all e-commerce transactions globally by value in 2023. — According to Juniper Research. –> [RETWEET IT

1. Shopify boards the split train

Shopify's board announced plans to seek shareholder approval for a 10-for-1 stock split. Under the proposal, $SHOP shareholders on June 22 would receive nine Class A or Class B shares for every one share held.

This split follows similar proposals from Alphabet, Amazon, GameStop, and Tesla in recent weeks.

In addition to the stock split, Shopify's board proposed offering its CEO Tobias Lütke a non-transferable founder share, which would increase his total voting power to 40% when combined with the Class B shares owned by himself and his immediate family. This move would allow him to remain in charge of any big decisions at the company, such as blocking takeover offers.

Under the current structure, if the proportion of supervoting Class B shares fell below 5% of total shares outstanding, they would automatically convert to Class A shares, creating a situation where offering equity for financing or acquisitions could pose a threat to Lütke’s control.

In other Shopify stock related news,the company has changed its employees' compensation packages to offer more flexibility between cash and stack components, hoping that this will help address employment challenges brought on by its recent fallen stock price. Employees will soon be able to choose to allocate more or all of their earnings to cash only without any equity, or vice-versa. 

How many shares do I get for publishing this newsletter each week? Let's see… 0 shares after the split equals…. 

I actually own way too many Shopify shares (but I bought them myself, no gifted equity), and I have no problem with a 10:1 split going through. Can't hurt the stock at this point, right?

2. Shopify makes a big bet on Bitcoin payments

Shopify announced an integration with Strike, a crypto payments network, aiming to make things easier for their merchants by allowing them to accept digital currency and save on processing fees through cash-final settlements.

Through the integration, Lightning Network, a decentralized network that uses smart contract to enable instant payments, will convert BTC payments that come through Strike into U.S. dollars, as to limit volatility in price. In other words, to help prevent a merchant from accepting $200 worth of BTC as payment, only to have it be worth $180 by the time they go to convert it into USD. 

Aside from instant payments, building the payments processing on top of Lightning Network will help reduce the cost of accepting crypto for merchants. Right now the average transaction fee on Bitcoin’s main chain itself is currently $1.60, while only $0.00044 on Lightning Network. Quite the difference!

However I'm curious how, if any, reducing payment processing fees will affect Shopify's bottom line. I assume they'll still get their roughly 2% transaction fee for using a 3rd party merchant. 

Strike also struck deals with NCR, one of the world's largest supplier of POS terminals, and Blackhawk Network, an e-commerce platform with 775M cards issued annually and 400k integrated storefronts.

3. Speaking of Shopify and crypto…

Last April I reported that a class action lawsuit was filed against Shopify and the crypto wallet firm Ledger over a 2020 customer data breach that exposed hundreds of thousands of customers’ personal data. The Ledger wallets themselves were not compromised, however, leaked Shopify data revealed who bought the wallets, which resulted in phishing attempts, threats of home invasion, and other scareware tactics.

In November, I provided an update on that story when a California court dismissed the case after finding that the United States-based court does not have jurisdiction over Shopify or Ledger, given that the two companies are headquartered in Canada and France, respectively.

Well, that dismissal apparently is not the end of the legal saga for Shopify and Ledger, who are now facing another lawsuit from crypto holders over the data breach. This new suit was filed in the United States District Court of Delaware on Friday and alleges that Shopify “repeatedly and profoundly failed to protect its customers’ identities.”

Shopify and TaskUs, its third-party data consultant, are being held responsible by complainants for leaking the personally identifiable information of Ledger buyers despite marketing promises assuring the full security of the Shopify platform. 

The plaintiffs also claim that the two companies were aware of the data breach for over a week before notifying customers. They are asking for the exact type of information leaked to be disclosed by Ledger and Shopify and for a monetary rewards that covers actual and punitive damages.

The outcome of this legal battle will make for an important precedent in Shopify's future relationship with cryptocurrency. Just how responsible is Shopify for the safekeeping of user's crypto data when partnering with 3rd party platforms — like with its new deal with Strike? And if Shopify is directly responsible, does it have the teams in place to handle crypto security?

4. Fast lives up to its name in regards to how long it took to  go out of business

Two years after its launch, the online checkout startup Fast is closing its doors for good, according to an announcement posted on the company website last Tuesday.

Fast's CEO Domm Holland wrote, “Sometimes trailblazers don’t make it all the way to the mountain top. But even in those situations, they pave a way that all others will follow. Fast has done that with bringing one-click and headless checkout into the mainstream.”

Cash burn was apparently an issue. Fast had raised more than $120M in the previous two years, but that didn't prove to be enough. An unnamed Fast employee told Protocol, “We waited too long and we ran out of money,” and that Fast “misjudged significantly” the mood of venture capitalists to keep investing money in the company.

The BNPL company, Affirm, is reportedly offering jobs to a vast majority of Fast engineers.

An Affirm spokesperson wrote in an e-mail to TechCrunch, “With Fast winding down its operations and discontinuing its brand and products, we saw another opportunity to invite a great technology team to join us. While we do not have plans to get into the one-click checkout business, we look forward to welcoming many of Fast’s talented engineers to Affirm as we continue to advance our existing product roadmap in support of our mission to build honest financial products that improve lives.”

5. What are the most popular apps with teens?

Have you ever wondered which apps teens are using now-a-days? Well, if you don't have any teens of your own in the house to ask, I'll shed some insight for you today. 

Social Media: According to a recent survey, TikTok is now teens’ favorite social media platform, surpassing Snapchat for the first time. Facebook and Twitter barely registered with the age group. 

The poll surveyed 7,100 U.S. teens in February and found that 33% favored TikTok, up from 29% in 2020, when the last semi-annual teen survey was conducted. Snapchat fell from 35% favor to 31%. Laughingly, only 3% of teens reported to favor Facebook and only 2% liked Twitter best. Maybe that'll change with Elon takes the reigns? 

One more piece of bad news for Facebook… 48% of teens surveyed said that they are either unsure about or not interested in the metaverse.

Payment Apps: Apple Pay ranked first among payment apps, but mostly due to how many teens have iPhones. A drastic 87% of teens reported owning an iPhone, while 87% of the remaining non-iPhone users expected an iPhone to be their next phone. I thought teenagers valued uniqueness? I guess they all have different iPhone cases. LOL.

This is good news and perfect timing for Apple who are making big moves into the payments space to compete with commerce platforms like Square, PayPal, Google, and Klarna.

Bloomberg recently reported that Apple is launching an initiative code-named “Breakout” to bring more financial services capabilities like payment processing, risk and fraud analysis, credit checks, and customer service in-house. Last week I reported that Apple acquired Credit Kudos, a UK-based open banking company that helps lending streamline and improve their loan underwriting efforts.

Switching operating systems is difficult, and we develop habits at an early age. For example, I'm still a Windows guy because I started out using Windows in elementary school when the librarian asked if I wanted to use a PC or Mac.

Jumping ship to a different mobile operating system and digital ecosystem has become more than just a learning cure nowadays, as the digital products and services we license are tied to specific platforms. So teens who get started with iPhones may stay in the Apple ecosystem for quite a while. The teens that are so addicted to their iPhones today will one day grow into iPhone addicted adults with jobs and credit cards of their own. 

6. Dropbox wants a piece of e-commerce too

Here's some wild and unexpected news for you… The cloud backup and file syncing platform, Dropbox, has launched into open beta a platform called Dropbox Shop that allows creators to sell digital content directly to their customers. It's currently only available to individual accounts based in the United States and in English only.

Users can add digital content directly from Dropbox, set a featured image or audio/video preview, and then list the item for sale. Dropbox then creates a shareable or embeddable link that creators can paste into social media posts, emails, and websites.

At the moment, while in Beta, the company does not take a percentage cut of transactions and only charges a payment processing fee of 2.9% + $0.30 per transaction — which is about standard for the industry.

Here's what's funny and smart about Dropbox Shop. Right now a huge amount of NFT projects are stored on Dropbox servers, but the company doesn't receive a piece of the financial transaction. They merely host the NFT files. You might not realize this, but NFTs aren't actually hosted on the blockchain itself — only a link to the file is hosted on the blockchain, while the file itself is often stored on Dropbox or Google Drive.

Therefore I think it's brilliant that Dropbox is looking to enter into the e-commerce and fintech side of hosting digital files, rather than just concentrate on the hosting end, which has become a bit of a commodity at this point. 

However bringing user hosted financial transactions into their suite of products brings new security challenges to the platform — which I hope Dropbox is prepared to handle. 

7. Tata takes on Amazon and Walmart with a super app

The Indian conglomerate Tata has launched a new super app called Tata Neu in attempt to rival Amazon and Walmart-owned Flipkart, each of which owns around one-third market share in India. 

Tata Neu blends product commerce, service commerce, and financial services into a one-stop integrated experience, as well as a rewards program called NeuPass, where members earn 5% or more NeuCoins every time they shop, dine, or travel via the app.

Downloads quickly topped one million within a few days of the app's launch, but unfortunately for Tata, the app encountered a lot of issues during its first week on the market. Users complained of an inconsistent experience and significant app downtime. Others complained that the app does not offer a single shopping basket for the services it aggregates.

Tata is the largest Indian-owned business in the country and is smartly looking to capitalize on the Indian government's newly introduced laws designed to make life more difficult for foreign e-commerce companies.

The app experienced some launch pains, and users expected better, but it's a big undertaking, and I'd imagine it'll improve over time. I look forward to following the progress of Tata Neu as super apps become a regular part of the e-commerce conversation worldwide. 

8. Other e-commerce news of interest this week

  • Eytam Magini, a Wix employee, was murdered by a terrorist in Israel along with two other victims during a shooting spree in Tel Aviv. The gunman, a 28-year-old from Jenin in the northern West Bank, was tracked down to a mosque in Jaffa after a manhunt and was killed in a shootout.
  • Amazon issued a home entry compliance enforcement policy which enforces that it's against their policy to enter a customer's home unless certain criteria is met. Sellers are required to deliver items to the customer's porch, driveway, or garage, not inside their home. So customers no longer have to ask, “Should I leave the money on the dresser or the nightstand?” 
  • Richard Liu, billionaire founder of, stepped down from his position as CEO and will hand over the reins to the company's president Xu Lei. Liu will remain as the chairman of the board and continue to focus on's long term strategies.
  • Zilch is partnering with Experian to update its BNPL affordability criteria, which will help them better assess whether their 2M customers are actually able to pay later. This is in the wake of recent investigations by governments as to whether or not BNPL firms bypass existing consumer credit laws. 
  • Amazon Prime got more expensive in Canada, going from $79/year to $99/year, just a few months after the company raised rates for its US subscribers.
  • Instacart is coming after users who remove tips post-delivery by requiring feedback if a tip is removed, deactivating customers who consistently remove tips, and reducing the tip-adjustment window from 3 days to 24 hours. Moving forward, the company will also cover the amount of the zeroed-out tip up to $10. 
  • A former Block employee stole over 8 million names and account numbers of Cash App users this past December, and it either took the company four months to discover or reveal the data breach — neither which is a good look.
  • Kroger is making Bed Bath & Beyond products available on its website with plans for an in-store pilot. This move is part of the grocer's attempt to have its customers think of it as more than just a place to buy food.
  • Tencent shut down Penguin Esports, its video game streaming platform that rivaled Twitch, citing a change in business strategy, just months after Chinese regulators shut down a multi-billion dollar merger between Huya and DouYu, two live streaming platforms that Tencent had a significant stake in. 

9. This week in seed rounds, IPOs, & acquisitions….

  • Bolt, a one click checkout app that integrates with e-commerce platforms, is acquiring Wyre, a crypto payments infrastructure platform, for $1.5B. The cash-and-stock deal adds crypto payment capabilities to Bolt's e-commerce checkout technology. 
  • Novel, a no-code platform that allows retailers to establish and distribute NFTs on Shopify alongside their physical products using Polygon protocol, raised $6M in a seed round led by Lerer Hippeau. The company will use the funding to add new features for brands and creators to utilize NFTs as part of their loyalty and community building strategies.
  • Wholesum, a Seoul-based e-commerce aggregator, raised $35M in debt and $15M in equity in a Series a round led by Kingsway Capital, Antler Global, and Widus Partners, just a few months after raising $4.75M in seed funding and $18M in debt in November 2021. The firm currently has five Korean local brands and aims to acquire an additional 15-20 brands across lifestyle, health, children and pet categories this year. 
  • Amenitiz, a Barcelona-based all-in-one property management system for independent hotels and B&Bs in Europe, raised $30M in a round led by Eight Roads. The company will use the funding to expand its business into new European markets and grow it's team by 200 staff members.
  • The Folklore Group, a fashion e-commerce startup, raised $17M in pre-seed funding in a round led by Slauson & Co and announced a shift from D2C to B2B wholesale. The B2B platform, The Folklore Connect, will sell products of up to 30 African fashion brands that have a proven track record and can keep up with demand.
  • Validity, a provider of data quality and e-mail marketing success solutions, acquired MailCharts, a platform that powers data-driven campaign planning for e-commerce marketing teams. The acquisition will allow Validity's e-mail marketers to launch more creative and optimized campaigns.
  • ImaliPay, a Nigerian fintech startup that allows eRide hailing drivers and gig workers to get access to working capital, raised $3M in a funding round. The company aims to foster financial security and inclusion to Africans in the gig economy.
  • Ritmo, a Madrid-based fintech startup that provides working capital financing and automated BNPL payment system for e-commerce businesses, raised $200M in debt in a funding round led by i80 Group and Avellinia Capital, bringing its total amount raised to $225M in debt and equity. The company will use the funding for additional growth and ensure capital is available to fuel the funding of its over 2,000 e-commerce clients in Europe and Latin America.
  • Lilt, a provider of AI-powered business translation software, raised $55M in a Series C round led by Four Rivers. The company will use the capital to expand its R&D efforts and its customer footprint and engineering teams.
  • SamCart, an e-commerce platform aimed at content creators, raised $82M in a round led by Eldridge. The company seeks to expand its business including into the payments space.
  • BankBazaar, a co-branded credit card issuer and online platform for free credit scores, is preparing for an IPO in 2023. The company plans to recruit over 1,500 new employees for its expansion of tech and products to support more revenue growth this yea.
  • SwooshTransfer, a startup that provides international money transfer services using privacy computing and blockchain to manage regulatory paperwork, raised an undisclosed amount in the millions, in a round led by Sequoia China and K2VC. The company opened an office in the U.K. which it plans on leveraging to enter other European markets. 
  • PayRetailers, a Spanish online payment platform that integrates more than 250 payment methods, acquired Paygol, a Chilean payment platform, and Pago Digital, a Colombian payment platform. The deals are intended to expand the company's card processing market share and e-commerce capabilities across Latin America. 
  • Zhiyi Tech, a Hangzhou-based AI startup that turns social data into actionable insight for designers to help fashion brands predict best sellers, raised $100M from three rounds of funding led by GL Ventures, Zoo Capital, Xianghe Capital and CE Innovation Capital. The company helps brands manufacture clothes based on real-time consumer sentiment and fashion trends rather than try to build a supply chain that can sell.
  • Peeba, a Hong Kong-based B2B wholesale online platform that connects independent retailers across Asia with unique brands around the world, raised $4.2M in seed funding in a round led by Headline Asia, bringing its total amount raised to $5.8M. The company will use the funding to double its headcount and expand local offices to improve local language support across 11 Asian countries. 
  • Shein, a Chinese fast fashion e-commerce startup, is aiming to raise $1B at a $100B valuation. The company is in talks with General Atlantic for this new funding round.
  • Jüsto, a Mexico City-based online grocer which claims to be the first supermarket in Mexico with no physical store, raised $152M in a Series B round led by General Atlantic, who led their $65M Series A round last February. The company is focused on continuing the personalization of its products in each city and plans to develop relationships with small and medium farmers to buy from them directly. 
  • Productsup, a platform that helps retailers leverage multiple channels to sell products, raised $70M in a round led by Bregal Milestone. The company will use the funding to accelerate R&D and product development and enter new global markets.
  • Parentinc, a Singapore-based startup that runs a parenting community and D2C product line, raised $22M in a round led by East Ventures, just weeks after the company added LINE Southeast Asia as a shareholder. The new capital will be used to expand theAsianparent and Mama's Choice into three new markets before the end of 2022.
  • Noissue, a New Zealand-based packaging platform that offers custom sustainable packaging, acquired Tapkit, a London-based startup that develops tailored digital customer experiences for brands L’Oréal, NYX, Haus, TRIBE. The deal gives Noissue a team and the tools necessary to build microsites and dynamic QR codes.
  • Grover, a Berlin-based a tech rental platform, raised $110M in equity and $220M in debt in a Series C round led by Energy Impact Partners with Fasanara Capital providing the debt. The company will use the funds to expand its stock of devices, build out more tools and financial services, and drive deeper into markets like the U.S.
  • PayU, an online payments solution provider, agreed to acquire Tecnipagos S.A., which operates as electronic deposits and payments platform Ding, pending approval of Colombian regulatory bodies. The deal expands PayU's reach across Colombia and gives it a presence in more than 50 countries around the world.

What'd I miss?

Shopifreaks is a community effort and I appreciate your contributions to help keep the rest of our readers in the know with the latest happenings in e-commerce. Whenever you have news to share, you can e-mail [email protected] or hit reply to any of my newsletters.

You can also mention @shopifreaks on Twitter or submit posts to r/Shopifreaks on Reddit, and I'll curate the best submissions each week for inclusion in the newsletter. 

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See you next Monday!


Paul E. Drecksler
[email protected]

PS: My friend got fired from the keyboard factory. He wasn't doing enough shifts.  

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