The best E-commerce stock plays are not the big ones, or the recent IPOs like Wish. Nobody can say Covid-19 has not been good for E-commerce sales, but it’s a couple of Toronto startups than I think are among the best E-commerce players at the end of 2020.
They are Emerge Commerce (ECOM) on the TSX Venture Exchange and Namaste Technologies ($NXTTF) on the OTC. They are currently at prices of $1.36 and $0.16 respectively and are both growing companies that will have amazing years in 2021. ECOM recently went IPO, and it’s that stock that we should talk a bit more about.
Toronto-based e-commerce startup Emerge Commerce initially announced plans to go public in May. Last week we saw the company officially close its reverse takeover of Aumento. It began trading Monday under the symbol ‘ECOM.’ Who could blame a company to go IPO at the end of 2020, only the best time in history.
So what makes Emerge such an appealing company to invest in? You can see their website here. They claim to connect over 2 million members with 12 thousand merchant partners across North America.
Their network of e-commerce sites provide limited-time offers on golf, groceries, essentials, nearby staycations and experiences. Their portfolio houses some of Canada’s most coveted online destinations.
Just like the Amazon of Russia stock $OZON, Emerge has some incredible potential in the long run. With the pandemic and the 2nd wave shutdown which could last many weeks, E-commerce consolidation in retail is hitting its stride in the stock market.
Founded in 2015, Emerge developed an e-commerce network by acquiring and operating niche North American market leaders in the digital deals space. The company operates in a variety of categories, including groceries, essentials, golf, online subscriptions, retailer coupons and experiences, among other categories. Emerge brands include UnderPar, WagJag, JustGolfStuff, Buytopia, and Shop.ca.
As of December 17th, Emerge is reporting revenue increases of 196%, with Positive Adjusted EBITDA. I’m a huge believer in Toronto startups in particular in the Canadian startup landscape. 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.
This is the company’s reported revenue:
Here we are talking about a SPAC. Emerge signed a letter of intent to acquire Aumento through a reverse takeover, and the proceeds will mostly go towards upcoming acquisitions as well as growth capital. So why do I like this company? 2021 is going to be the beginning of a retail renaissance that favors E-commerce brands strongly. Many E-commerce stocks have already shot up in 2020, but some unique startups have considerable upside.
Their 52-week high is currently CDN $1.74. The price is currently $1.35. This startup has acceptable risk for a medium term investment. I would hold this for around 6 months for optimal returns.
Emerge is on the CVE, the Canadian Venture Exchange (Calgary) side of the TSX. Recently there’s been a lot of ethical food startups that are doing very well on the CVE. $PLTXF comes to mind, who brand themselves as a plant based community. Part of how Canadian E-commerce startups pivot will be towards the ESG trend and the values that appeal to Millennial and GenZ retail investors.
Ultimately you have to do your DD on the leadership of ECOM to make sure you believe in them. Ghassan Halazon for example. Toronto startups have quite interesting leadership typically.
The company has around 1,000 followers on LinkedIn. Toronto startups have the highest chance of success in all of Canada by quite a wide margin in 2021, due to all the talent that has been stockpiling there and the improved access to capital. This is the first week the stock has been on the TSXV.
Since Emerge Commerce is such a new stock, there’s relatively little written about it online at the moment. Here’s the Canadian press release. The Betakit story is from May, 2020. With Etsy having such an incredible year, E-commerce is all the rage and will be in 2021 as well. Just look at Pinduoduo’s stock to see the kind of 2020 E-commerce brands have had in their stock prices.
With around 42 employees, it was founded in 2015. However only about 20 employees are listed on LinkedIn. Some of the best stock growth will actually come from E-commerce startups you’ve never heard of which is why we decided to write about Emerge Commerce, Namaste Technology (Cannabis sector) and so forth.