Geneviève Caron/The Globe and Mail
When Lightspeed went public earlier this year, in a wildly popular offering that sold out almost immediately, founder Dax Dasilva raised the software company’s red and black banner on the flagpole of the historic building housing its Montreal headquarters.
“We didn’t ask permission,” he says unabashedly.
None was likely needed. When it moved into the Place Viger hotel in 2015, Lightspeed POS Inc. resurrected the neglected French château originally built for the Canadian Pacific Railway. And these days, the money-making buzz surrounding Dasilva (age 43) and his 800-plus Lightspeed employees (average age, 31) is more than enough to bring any nervous landlord onside.
Lightspeed’s colours fly like a symbol of corporate attainment—a declaration that after 14 years of bootstrapping and carefully considered private investment partnerships, its public moment has arrived.
The company has stretched around the planet, adding capability through acquisitions. It rolled out payment processing this year and is now eyeing other offerings, like workforce management. With a client roster of 51,000 businesses across 100 countries, Dasilva says he’s barely scratching the surface of revenue possibilities in a global pool of 47 million retailers and restaurants alone.
The Vancouver native, who dropped computer science at university before studying religion and art history, conceived Lightspeed as a way to boost independent businesses as they fight bigger and better-capitalized rivals. His software was initially modelled on Apple Inc.’s iTunes media platform—a clean interface designed to be intuitive. Today the company offers small and medium-sized retailers a growing suite of cloud-based point-of-sale services.
Lightspeed’s genius hinges on Dasilva’s ability to understand how retailers interact with customers and then engineer quick and easy to use operations systems. The spark for the company was lit when Dasilva was 12. An artistic and academic kid from a family of entrepreneurs and intellectuals, he learned how to program a $5,000 black and white Apple Macintosh computer his dad bought for him, becoming obsessed with conceiving tools to unleash the machine’s creative power.
All through his teens and early 20s, he wrote code and did tech support for Apple dealers and other companies. He was the employee dispatched to the customers who had the least computer knowledge, because he could humanize the technology. In turn, he used their criticism to build more instinctive digital systems. Dasilva has now built a career on finding novel solutions for people’s complex problems. And as small businesses move away from old cash registers and other stationary checkout systems to the kind of Internet-based solutions Lightspeed offers, he’s in demand more than ever.
“As we were doing the road show [for the IPO], I knew this was going to work,” Dasilva says of Lightspeed’s market debut. But even he couldn’t have imagined the extent of the enthusiasm.
Investors snapped up the initial $200 million in shares the company put up for sale last spring after just the first day of Lightspeed executives’ North American tour. Dasilva and his team were hoping to get at least one of the five major investment firms they were targeting. Instead, they got all of them, including Fidelity Investments and Wellington Management. The offering was then upsized, but it was still dwarfed by demand. Total orders received when all was said and done: about $3.6 billion, according to people familiar with the matter. The shares have roughly doubled from their $16 price since March.
Part of the investor excitement about Lightspeed centres on its preoccupation with data. The company’s head office is peppered with overhead screens displaying perpetual updates on important performance statistics like new sales, website visits and the number of customers waiting to be helped. This allows Dasilva to get a real-time picture of what’s going right and what’s gone wrong. That’s key for a company trying to grow while pushing toward profitability (a target with an unspecified timeline). The data also gives him insight into the metric that matters most for Lightspeed: the cost to acquire customers versus their long-term value.
Along with his ability to parse data, investors are also buying into Dasilva’s capability as a leader. And that, while not as easily measurable, is crucial, says John Locke of Palo Alto, California, venture capital giant Accel Partners, an early investor in Lightspeed.
“We loved the market too, but we were mostly betting on Dax,” says Locke of the initial investment. The Lightspeed founder had a maniacal drive to have the best product on the market, he says. Over time, Dasilva also honed a keen ability to recruit some of the best software talent in North America and empower them to internalize and execute his vision, Locke says.
To some extent, bringing in new people is all about self-preservation. In Age of Union, an introspective book released earlier this year, Dasilva wrote: “This is an easy thing to forget. You begin to claim all of the successes, and you begin to internalize all of the failures. In my experience, it is best to let go of both and recognize your leadership role as an instrument, a conduit or a stewardship of something that is beyond you and your doing alone.”
Dasilva is unapologetically ambitious while recognizing his own limitations, something that became abundantly clear in his frequent visits to Silicon Valley, Locke says.
“From the get-go, he was a real sponge for feedback,” says Locke. “He came out here a lot. He’d have his notebook out and ask a bunch of questions, and was always trying to get better and better.… Sometimes you meet people who have all the answers and are not really seeking any feedback. Dax is just constantly trying to learn.”
In 2017, Caisse de dépôt et placement du Québec, along with other investors, bought Accel’s Lightspeed stake. The investment marked the pension fund’s biggest wager on an emerging Canadian tech firm since the dot-com bubble. It was also largely a bet on Dasilva. At the time, Lightspeed had been approached by several larger tech players for a takeover, but the founder felt there was an opportunity to build something much bigger over time with Caisse’s backing.
“A lot of entrepreneurs in Canada would have just said, ‘Let’s sell the company and cash out,’” says Thomas Birch, who oversees Caisse’s private equity venture capital funds and technology investments in Quebec. “But money is secondary for Dax.… [He] always takes a long-term view.”
Dasilva laughs when asked how the company will grow after retailers have all migrated en masse to cloud-based payment processing. There are always new businesses opening and new retail concepts being developed, he says. And as long as Lightspeed can understand how consumer behaviour is changing, it can build technology to simplify those transactions.
“We think Lightspeed is in the early days of capturing a very large market opportunity,” says Thanos Moschopoulos, a Bank of Montreal analyst. The company’s cloud-based software can play “an essential role” in helping small businesses with storefronts maintain their relevancy with consumers in the face of changing consumer expectations, he says.
Lightspeed is often compared to Tobi Lutke’s Shopify Inc., the $48-billion titan that’s now the face of Canada’s tech renaissance. But while there are similarities—both companies play in the e-commerce space—Lightspeed is, for now, much smaller. And Dasilva’s firm targets mainly businesses with real-world street addresses, like bike shops and bakeries, that want to access the digital consumer space.
Besides, it would be hard to picture Dasilva sporting the tweed cap that’s become Lutke’s trademark. The adopted Montrealer, who favours black shirts and meditates daily, is more rock star than recluse.
“Music and a social life defiantly recharge and inspire him,” says long-time friend Michael Venus, who runs Dasilva’s Never Apart cultural centre. “He is a very social person.”
In many ways, the corporate culture Dasilva has fostered reflects him: creative, inclusive, diverse and not afraid to break the mould. For example, Lightspeed rejected recommendations that its stock list in both Canada and the United States, in favour of a domestic-only presence. Internally, they called it Project Patriot.
Dasilva is one of the few openly gay CEOs at a prominent Canadian company and is slowly becoming accustom to his anointment as a public role model for the LGBTQ community. But the way he thinks about business goes beyond accepting difference. It’s also about how technology can help people reconnect with the real world—with merchants repairing bicycles and baking cakes in local neighbourhoods—and not just sit at home opening mail-order packages from Amazon.
“It’s the unique businesses in a city that give Montreal or Toronto or Vancouver or any of our cities their originality,” he says. “They deserve to have technology they can access, you know, for $100 a month, that puts them on a level playing field.”
Nicolas Van Praet