Canadian Ecommerce Company EMERGE Sees Significant Growth Through Website Acquisitions

EMERGE, a disciplined, diversified, rapidly-growing acquirer and operator of e-commerce assets, has seen tremendous growth as it rides the wave of the growing trend in online shopping.

In its third quarter, for the three months ending September 30, the Toronto-based company saw gross merchandise sales growth of 251 percent from a year ago to $7.7 million. Revenue jumped by 196 percent to $2.2 million. Also Adjusted EBITDA was positive $62,196 compared to negative $173,681 in Q3 2019.

“EMERGE’s third quarter results demonstrate the impact of the acceleration of consumer spending online,” said Ghassan Halazon, Founder and CEO of EMERGE. “Our diversified e-commerce portfolio grew rapidly in the quarter as we saw strong demand in a number of key verticals, including groceries, essentials, and golf products, which offset COVID affected categories. This performance is a testament to the agility of our business model, the resilience of our merchant partner network, as well as the great trust instilled in us by our loyal customer base.

Ghassan Halazon
Ghassan Halazon

“The quarter continues the trend this year of strong revenue growth and positive Adjusted EBITDA, demonstrating our consistent commitment to disciplined operations and prudent capital allocation. It’s truly a momentous time to be at the forefront of Canadian e-commerce, a sector that has experienced more growth in recent quarters than it has over the prior decade. EMERGE is better positioned than ever to continue to acquire, integrate, and accelerate quality e-commerce brands.”

EMERGE Connects 2 Million Members With 12,000 Merchant Partners Across North America

Halazon said the company, which was founded in 2016, connects more than two million members with 12,000 merchant partners across North America. Its portfolio includes UnderPar.com, JustGolfStuff.ca, WagJag.com, and BeRightBack.ca.

“We’re a disciplined acquirer and operator of digital or niche e-commerce brands. Our network of e-commerce sites provide offers on everything from golf to groceries, essentials, nearby staycations and experiences,” said Halazon.

“Right now we’re focused on pure play e-commerce sites.”

EMERGE was named one of the fastest growing companies in Canada by the Startup 50, and the Globe and Mail’s 2020 Canada’s Top Growing Companies.

Halazon said he and other veteran e-commerce and technology entrepreneurs and operators have been in this space for the past decade or so.

“We realized that the small to mid market e-commerce is challenged from an exit opportunities perspective. That is to say that the small bootstrap niche e-commerce companies were not getting a lot of attention from the Amazons of the world. So Amazon is more interested in acquiring the Whole Foods of the world. Private equity folks are interested in acquiring sorts of relatively bigger e-commerce companies that are either public or that have sort of $100 million plus range in sales,” said Halazon.

“That carved us an interesting opportunity to consolidate this small to mid market. That’s what we do. We actually go out, we acquire these often bootstrap businesses in e-commerce and when we acquire them we consolidate them. So we integrate them under a universal platform and playbook where they share everything from technology to resources to data. So the idea is power in the group. Power in the scale.

“In essence what we do is when we acquire a business we’re basically helping them centralize a lot of things that are non-core to the niche itself.”

Halazon offered an example of what EMERGE can do. He said the company acquired WagJag for about $500,000 from newspaper giant Torstar which was looking to restructure. And EMERGE has since driven $30 million in gross sales in three years and made its money back in six months in what Halazon describes as a “very lucrative acquisition.”

The e-commerce trend has been a growing one in recent years but it has been accelerating for the past few months during the COVID-19 pandemic.

“Obviously we’ve seen a monumental rise in e-commerce here where the last couple of quarters we’ve experienced more growth in the sector than e-commerce has seen in the prior decade,” explained Halazon. “So from our perspective, sitting at the forefront of Canadian e-commerce, there’s never been a better time for us to prove out this thesis and we believe we are well-positioned to go out and consolidate this small to mid market e-commerce space.

“There’s thousands of fast-growing, profitable e-commerce companies that have been created and are continuing to thrive in this pandemic world. As an acquirer and operator, from our perspective, there’s no shortage of pipeline to go after. The types of businesses we look at often exhibit between $1-$5 million in profit and between $5-$50 million in revenue. When we go speak to these groups, we offer them a win-win scenario where they get to continue on with us under the EMERGE umbrella, they keep their brand, they keep their team and offices, but they get the fair portion of the consideration in cash and the remainder they get through EMERGE shares which are faring quite well and some earn out over a multi-year period.”

Article Author

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer and consultant in communications and media relations/training.

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