How Shopify Growth & Generate Revenue
It was the best of times, it was the worst of times. It was 2021.
We had one heck of a year, and so did our merchants. As we navigated through Year 2 of COVID, Shopify kept doing everything possible to help more businesses thrive during the pandemic—and that led to the wild year that was 2021.
For the first time, Shopify brought in more than $1 billion in Merchant Solutions revenue in a single quarter (Q4). Only six months earlier, we hit $1 billion in a quarter for total revenue. Shopify’s total revenue for 2021 was $4.6 billion (an increase of 57% year-over-year), and our merchants sold $175.4 billion on our platform—up 47% from 2020.
These are each a different way of saying: we saw big-time growth as the world kept embracing independent businesses, and as Shopify continued to become the default choice for entrepreneurs.
Entrepreneurship is on the rise—a record-breaking 5.4 million new business applications were filed in 2021, compared to 4.4 million in 2020, according to the US Census Bureau. And record numbers of people are leaving the traditional workforce to bet on themselves.
In 2021 Shopify:
Powered the creator economy by announcing in-app shopping experiences with TikTok, and launching an integration with Spotify where musicians can monetize their fans with custom merch.
Helped our merchants scale to new heights with 7 companies on Shopify going public, and our global ERP program launching alongside Microsoft and other leaders to help high-volume merchants scale with us.
Kept building our fintech powers with massive growth in Shopify Capital and Balance (read on for more), Shop Pay Installments launching to US buyers, and announcing that Shop Pay will be available to any business selling on Google or Facebook, whether or not they’re on Shopify.
Enabled cross-border commerce for all merchants with Shopify Markets, to make it easier and more accessible to sell globally.
Continued their international expansion, including Shopify POS hardware launches in the UK, Ireland, Germany, Australia, and New Zealand.
Made it easier to shop from independent businesses with enhancements to Shop, our all-in-one mobile shopping assistant. We added an analytics dashboard, automated marketing tools, in-app cart and checkout with Shop Pay or Installments, and curated discovery filters.
They launched Shopify Capital in 2016 to serve the unbanked. In early 2021, we hit a milestone of $2 billion in funding for entrepreneurs who needed it, and by the end of the year that number reached more than $3 billion. Merchants in the US, Canada, and the UK received $324 million in funding from Shopify Capital in our fourth quarter alone.
We also began rolling out our money management product, Shopify Balance, to US-based merchants. With a no-fee Balance account, business owners get fast access to their cash, a card for spending online or in-store, and rewards like cash back, perks, and discounts.
What key investment themes for 2022 are to help our merchants:
Build buyer relationships: When it’s love at first buy, we’ll help keep that magic alive. We’re building solutions that allow merchants to connect with more buyers, sell across more surfaces, and enable share-worthy shopping experiences—all while keeping control of their own brand. We’ll focus on Shop, Shopify POS, and social commerce to work this magic.
Go global: We’ll make it even easier for entrepreneurs outside North America to start and scale their businesses on Shopify. We’ll raise our visibility in more markets and bring them more localized solutions. And we’ll keep unlocking the massive opportunity of cross-border commerce for all our merchants using Shopify Markets and more.
Grow from first sale to full scale: We’re on the rocketship with our merchants, every step of the way. We’ll be launching easier onboarding to get started with us; focusing on Shopify Balance, Shopify Capital, and B2B offerings as merchants scale; and continuing to build the world’s best ecosystem of partner apps. We’ll keep bringing Shopify Plus to scaling brands around the world (shoutout and welcome to Hello Fresh, French Connection, Invisalign, and Tom Brady’s new athlete apparel line Brady Brand who all joined us in Q4).
Simplify fulfillment: We’re consolidating the Shopify Fulfillment Network (SFN) into larger facilities, and operating more of them ourselves. This will give us more control over quality and cost. We’ll also unify the network with our own warehouse management software to integrate with Shopify’s back office and checkout. That way, merchants can minimize their inventory investment and offer speedy delivery promises
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