The Israeli firm expects the acquisition to bolster its offering and capabilities and enable it to access an additional addressable market of small merchants who are otherwise not eligible to use its services
Global-e, an Israel-based provider of cross-border end-to-end platform for brands and retailers, has agreed to acquire Flow Commerce in a stock and cash deal worth up to around $500m.
Flow Commerce, which is based in New Jersey, US, is engaged in providing cross-border e-commerce software solutions for emerging brands.
The company’s technology is said to help brands in expediting and streamlining their global expansion as well as undertake cross-border sales in more than 200 countries.
Flow Commerce co-founder and CEO Rob Keve said: “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.”
Global-e expects the acquisition of the US firm to bolster its offering and capabilities. This will enable it to access an additional addressable market of small merchants who are presently not eligible to use its services, said the Israeli company.
Furthermore, Global-e believes that by tapping Flow Commerce’s API-based technology, it can offer small merchants a customised solution to suit their needs. This will be offered in combination with its own data models and artificial intelligence (AI)-algorithms for conversion optimisation, said Global-e.
The Israeli firm also expects the acquisition to expand the scope of its exclusive relationship with e-commerce firm Shopify.
Through the expanded partnership, the company expects to provide some of the cross-border services to a larger set of merchants on Shopify’s platform. This will be on top of the current end-to-end third-party solution from Global-e that serves established brands.
Concurrently, the Israeli firm has agreed to issue a warrant for around $70m of its shares to Shopify.
Global-e president and co-founder Nir Debbi said: “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.”
As per the terms of the deal, the amount will be paid in equal portions of cash and Global-e’s shares. It includes a base consideration of nearly $425m, a payment of up to around $75m contingent on certain financial results of Flow Commerce in 2021.
Additionally, Flow Commerce’s shareholders will get nearly $45m in Global-e’s shares for certain assumed, performance-based vesting warrants for their shares.
In the current year, Flow Commerce is anticipated to earn net revenues of around $20m.
The deal, which is subject to regulatory approvals and other customary conditions, is likely to close during the first quarter of 2022.