The purchase offer accepted this month by the Longueuil company mdf commerce and the strategic review announced by the fintech Montrealer Nuvei after receiving proposals did not leave the boss of Lightspeed indifferent.
” It’s interesting. It makes you think,” says Dax Dasilva in an interview.
“Nuvei is evaluating whether it can do more as a private company. People have made the same remark to me about Lightspeed,” adds the man who has been back since last month at the helm of the Montreal provider of technological solutions for merchants.
“I continue to believe that the Stock Exchange is a good place for Lightspeed,” said its founder. “But when you look at what is happening, you nevertheless wonder if closing the capital would be a better solution. We are always open to these discussions,” he adds, specifying that the Lightspeed board of directors continually evaluates strategic options.
Nuvei and Lightspeed have a lot in common. These two Montreal companies offer solutions related to electronic payment. Both made the jump to the stock market almost at the same time. Both saw their stocks explode during the pandemic before falling just as spectacularly. Both were victims of attacks in quick succession by the same short seller. And both count the Caisse de dépôt et placement du Québec among their main shareholders.
After listing at an initial price of $16 five years ago, Lightspeed’s stock rose to $165 before falling to its current level of $18.
Investors want to see operational efficiency. If we manage to improve our margins quarter after quarter, investors will support us and Lightspeed will once again be rewarded by the market.
Dax Dasilva, CEO of Lightspeed
The tech entrepreneur and environmental activist is leading Lightspeed again after replacing his friend JP Chauvet in mid-February, just days after the company presented its most recent quarterly results.
“There have been comments surrounding possible acquisitions, and that’s not the right focus for Lightspeed at this time. We don’t want to make an acquisition that would make the business model more confusing,” explains Dax Dasilva.
While he has the title of “interim” CEO, he says he will stay on for as long as necessary. “Ultimately, the decision is up to the board,” he said.
The first thing he did after announcing his return was to fly to meet with Lightspeed customers and employees in Asia.
“The last month has been one of observation to identify how it is possible to achieve operational efficiency gains. »
Priority to “profitable growth”
The company’s operations are being scrutinized to see how costs can be lowered.
“We are entering a phase where profitable growth is the priority,” says Dax Dasilva.
He claims to have already made changes saving several millions and cites as an example the transformation into virtual mode of a face-to-face gathering of thousands of employees from around the world.
The relaxation of the teleworking policy will also save money. The order required that management staff and new employees work face-to-face five days a week. It was three days a week for all other employees.
“It’s now three days a week (Tuesday to Thursday) in the office for everyone although employees can come five days a week if they want,” says Dax Dasilva. This measure makes it possible to reduce the costs of certain services such as those of the cafeteria (food is free for employees) at the head office, he specifies.
Sharing certain floors of the Gare Viger head office again with other companies as in the past is being examined. “We have plenty of space at Viger station. We are also conducting a review of all of our facilities. We have 17 offices around the world,” explains the 47-year-old manager.
Investors can expect more information when the next quarterly results are presented in May.
We will provide visibility for the next 12 months. And in the fall, at our investor day, we will provide an overview of goals over a three-year horizon.
Dax Dasilva, CEO of Lightspeed
The main challenge to face, according to him, is now to rationalize activities which, he says, are very dispersed around the world following the nine acquisitions made in recent years.
“We now need to see where it is not worth investing in to build a market,” says Dax Dasilva.
For example, Lightspeed had a strong hospitality presence in a European country and a team was created to develop the retail business.
Management is now looking at all these places where the company had a strong presence in one segment and where it is trying to build a presence in the other segment, as this approach does not appear to be generating the expected returns.
Dax Dasilva emphasizes that the nine acquisitions made it possible to accomplish the first step of the strategy, that is to say offering two flagship products: one for retail and one for hospitality.
The second step was to pair the products with the payment system. Litghspeed has now reached the third stage which is profitable growth.
“This third phase is no more difficult than building two flagship products or getting customers to use our payments system. It’s operational. It simply takes a focus to simplify the business model,” says Dax Dasilva.