Lightspeed is writing a new chapter in the Canadian tech story
The Canadian Establishment needed some new blood. On March 8, it got some, when Montreal-based Lightspeed POS Inc. debuted on the Toronto Stock Exchange.
Lightspeed’s shares closed 20 per cent higher, putting an exclamation point on the most successful initial public offering by a Canadian technology company in almost a decade. The surge pushed Lightspeed’s market value to about $1.7 billion, comfortably unicorn status. It also marked the arrival of Dax Dasilva, the founder and chief executive, as a national figure.
If you haven’t heard of him yet, you will.
“We’re in a new moment for the company,” Dasilva told me in an interview at the C2 conference in Montreal on May 24. “I’m in a new moment as a leader and I think that comes with a big responsibility to your tech ecosystem, to our small-business customers, to all of our customers, but also as a thought leader.”
There is something good happening in Canadian tech. But that’s not always a satisfying story, as it lacks protagonists. Shopify Inc. is a legitimate world beater, and probably the only digital-economy company that a casual reader of the Canadian business pages could name.
Lightspeed, which sells point-of-sale software for restaurants and smaller retailers in about 100 countries, will help the narrative.
Dasilva could have exited early like so many other founders. He scrounged money together for seven years and then partnered with venture capitalists to achieve scale. When the VCs wanted out, he negotiated a path to an IPO rather than sell to a bigger company.
He broke with convention again by listing only in Toronto, ignoring warnings that the decision would alienate international investors. Lightspeed raised $240 million, almost twice as much as Ottawa-based Shopify, which was valued at about $1 billion when it listed in Toronto and New York in 2015. Shopify’s market cap is now around $42 billion.
“I’ve had a lot of people in the ecosystem say that our IPO has opened new possibilities to what our tech companies are able to aspire to,” said Dasilva, who will host his first earnings call with analysts and investors on May 30. “We build these companies in Canada and then they evaporate as they get acquired by American or Asian companies,” he said. “I think we’ve reached a stage of maturity with our ecosystems that there’s growth capital available now, not just venture capital, but growth capital.”
A popular subject on the conference circuit these days, whether in Davos at the World Economic Forum, in Washington at the annual meetings of the International Monetary Fund, or in Montreal at C2, is diversity and inclusive growth.
Government needs to ‘stay attentive to the fact that we are competing globally for talent.’
Lightspeed CEO Dax Dasilva
The thinking is that economic and corporate policies must be adjusted to offset capitalism’s tendency to reinforce existing power structures at the exclusion of women and minorities. Grandees say from the stage that failure to change will cause confidence in the economic system to further erode, entrenching political instability. Companies and institutions that continue to populate their executive suites with white men from American and European business schools will suffer from having too many blind spots to keep up in a fast changing world.
It’s an attractive theory, save for one thing: its main advocates tend to be rich and/or powerful white people. They know little to nothing of what they speak.
Dasilva is a believer in the power of diversity, and he is a more authentic spokesman for the cause than many of its advocates in the Canadian liberal elite.
He is the son of Goan parents who fled to Canada as refugees from Idi Amin’s Uganda in 1972. He was born in Vancouver; came out as gay in his teens while attending an all-boys Irish Catholic high school; participated in the protests at Clayoquot Sound that saved the old-growth rainforests from clear cutting; attended the University of British Columbia, where he studied religion and art history while doing computer work on the side; and then moved to Montreal in 2001 at 24 years of age.
In 2005, he started Lightspeed and converted to Judaism. The original Lightspeed team was from the LGBTQ community. As he added people, Dasilva put an emphasis on ensuring he had a mix of backgrounds. He thinks it made the company stronger. You have to work harder to get an idea approved by a diverse table; if you succeed, the idea probably is a good one. All that arguing helped Lightspeed develop a “stronger sense of self,” which helped Dasilva and other executives push back against investors with “strong opinions” about how the company should be run.
“We looked at difference as a teacher,” Dasilva said.
Now, Dasilva plans to do some teaching. Earlier this year, he published Age of Union, a partial memoir that evolves into an explanation of his thinking about leadership, spirituality, and the environment.
He also appears ready to involve himself in economic policy.
Because size is an advantage in tech, and Canada is relatively small, governments will have to be a partner, Dasilva said. So far, they have been, he said, although he urged them to “stay attentive to the fact that we are competing globally for talent.”
I asked Dasilva if he was talking about taxes, a sensitive subject with the current federal government and in his home province. He demurred.
“We have to stay vigilant and we have to find ways to outdo our competition, outdo the U.S.,” Dasilva said.