Last week a mobile payment processor Square (NYSE: SQ) announced it would acquire Weebly, a technology company that helps customers build websites and online stores, for approximately $365 million in cash and stock. Together the companies will provide businesses and entrepreneurs with a full suite of services and omnichannel solutions to help them engage customers, manage orders, process payments, handle returns and exchanges, grow sales, analyze data and more.
The deal is expected to close during the second quarter of 2018, following the appropriate regulatory approvals. Until then, the companies will operate independently.
‘Square and Weebly share a passion for empowering and celebrating entrepreneurs,’ said Jack Dorsey, founder and CEO of Square and Twitter, in a news release. ‘Square began its journey with in-person solutions while Weebly began its journey online. Since then, we’ve both been building services to bridge these channels, and we can go even further and faster together.’
Weebly offers free website hosting, premium website design and hosting, online stores and marketing tools. With the acquisition of Weebly, Square will grow its customer base globally and add a new revenue stream. Weebly has millions of customers, including more than 625,000 paid subscribers, 40 percent of whom are based outside the United States. With the acquisition, Square will offer Weebly customers access to a payment solution.
‘Entrepreneurship gives an opportunity to people who were never given one,’ said David Rusenko, Weebly CEO. ‘Weebly has created technology that helps people bring their business idea to life online. Now, we will be expanding that vision to help entrepreneurs succeed beyond their website. I’m excited for Weebly to join Square and help build the future of commerce together.’
Alyssa Henry, seller lead at Square, also commented on the acquisition and how customers of both organizations will benefit.
‘Omnichannel commerce is our top focus area in 2018. From managing orders, appointments and payments to building a website, running a business is complex, and entrepreneurs around the world want powerful and intuitive tools,’ Henry said. ‘Whether they’re an artist, a winemaker, or a hairdresser, with Square and Weebly sellers will have one cohesive solution to build their business.’
Based in San Francisco, Square offers customers an open platform, giving sellers the flexibility to choose which third-party solutions in wants to integrate with. Currently, Square works with more than 100 partners who provide third-party apps with points of sale, payroll, accounting software and other back-office tools.
On the Square website, the company is showing Weebly as its featured partner and offering two promotions. When customers sign up for Square, they will receive free processing on their first $1,000 in credit card transactions during their first 90 days. When they sign up for Weebly, customers will save 20 percent off their first order at Weebly.com/Square.
Yesterday Square released its first quarter financials. Highlights include:
- Total net revenue of $669 million, a 45 percent increase year-over-year, including bitcoin revenue of $34 million
- Adjusted revenue was $307 million, a 51 percent increase year-over-year
- Gross payment volume of $17.8 billion, a 31 percent increase year-over-year
- Net loss of $24 million, an increase of $9 million from the first quarter for 2017
Since announcing its acquisition of Weebly, Square stock has increased slightly in value. Square made the announcement on April 26. On April 25, Square stock was $44.75 per share, its lowest point since April 3. On the day of the announcement, stock was valued at $46.74 per share. It has fluctuated since then. As of 4:48 a.m. today, Square is valued at $48.66 per share.
Though Square just posted a significant net loss for the first quarter, this acquisition will help the company grow revenue and customer base as soon as the deal closes. Because of the suite of integrate products the combined companies can offer, this is likely a very good deal for Square. Customers can get many of their business-related services solved through one omnichannel solution. The key to their success will be how the companies integrate their operations and their products and services together once the deal closes.