Lightspeed founder Dax Dasilva steps down as CEO, hands reins to president of Montreal tech giant

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Dax Dasilva, founder of Lightspeed Commerce Inc. LSPD-T and one of Canada’s most successful technology entrepreneurs, is stepping down as CEO of the company he started 17 years ago and handing the reins to president Jean Paul Chauvet.

The Montreal company, which supplies internet-based point-of-sale and payments software used by more than 150,000 restaurants, retailers and hospitality providers globally, announced the change as it unveiled third-quarter earnings after a difficult few months that saw its stock fall by 75 per cent.

The company said it generated US$152.7-million in revenue in the period ended Dec. 31, up 165 per cent year over year, and an adjusted operating loss of US$7.1-million. Its revenues were better than the US$140-million to US$145-million Lightspeed had forecasted and beat analyst expectations. Lightspeed’s net loss was US$65.5-million in the quarter, compared with a net loss of US$42.7-million a year earlier. Factoring out acquisitions, software and transaction revenue grew by 74 per cent. The stock stock fell 12 per cent in after-hours trading Wednesday.

The shuffle will see Mr. Dasilva become executive chairman and keep a hand in strategy while overseeing Lightspeed’s corporate social responsibility and diversity, equity and inclusion efforts. He replaces chairman Patrick Pichette, who becomes lead independent director. Mr. Pichette said in a statement that the board “is confident [Mr. Chauvet] is the natural choice” to become CEO.

Mr. Dasilva said in an interview: “JP has demonstrated amazing leadership at the company. This is a great time for him to step into the CEO role.”

But the change also amounts to a step back for diversity in corporate Canada. Mr. Dasilva is one of a small minority of non-white CEOs of Canada’s top public companies, and one of the only openly gay members of its ranks. Mr. Dasilva said he plans to stay “very involved” with Lightspeed – “I love it dearly” – while “creating room for JP’s incredible leadership.” He said he would continue to mentor young leaders from diverse communities.

Lightspeed was on a roll last September as its stock hit a high of $165.87 on the Toronto Stock Exchange, making it one of Canada’s most valuable publicly traded tech companies. Analysts were bullish: Lightspeed, which went public in 2019, had spent more than US$2-billion to buy five companies in the previous year and posted strong first-quarter results. Mr. Chauvet talked about entering a “Braveheart battlefield” with Shopify Inc. after one of its acquisitions put it in competition with its larger Canadian peer.

But the stock has since fallen 75 per cent fuelled by three events: In late September, short-seller Spruce Point Capital Management published a critical report, which Lightspeed dismissed as an inaccurate mischaracterization but which hurt the stock. The shares sold off further when Lightspeed released a revenue forecast in early November below analyst expectations. Concerns over interest-rate hikes then hit technology stocks hard, particularly unprofitable ones, including Lightspeed.

Mr. Chauvet said as CEO he had three priorities. He wants to continue evolving the company’s products, which are being overhauled as it integrates recent deals, and to hire top talent. His third priority is to keep delivering 35-per-cent to 40-per-cent organic growth, winning business from merchants as they switch from legacy, on-premise computer systems to online options.

“I believe Lightspeed is in the infancy of what it’s going to become,” he said.

Mr. Chauvet and Mr. Dasilva both dismissed concerns about the stock price, whose fall has cut the value of Mr. Dasilva’s Lightspeed stake to $570-million from $2.3-billion. “It’s been a moment where the resilience of the company shines through,” Mr. Dasilva said. Mr. Chauvet said Lightspeed is well-financed and “the water after the storm just needs to settle and we need to continue to execute and prove the value.”

Mr. Dasilva, 45, the son of Ugandan immigrants, grew up in Vancouver, protested against clearcutting in Clayquot Sound and learned how to program in his teens. He studied art history and religion at University of British Columbia before moving to Montreal, where he built software for Apple Macintosh dealers to help manage their stores with easy-to-use interfaces that mimicked the experience of using iTunes.

He launched Lightspeed from an apartment in 2005, and the local LGBTQ community played a key role in the early years as a source of his first employees and customers. Lightspeed grew rapidly after offering its software on mobile devices over the internet, enabling small retailers and restaurants to manage inventory, point of sale and other functions across multiple channels.

Mr. Dasilva self-financed Lightspeed until he landed a US$30-million investment in 2012 from Silicon Valley venture-capital company Accel. The deal established Lightspeed as one of Canada’s leading startups at a time when the country’s tech sector was reeling from the recession and downfall of titans Nortel Networks and BlackBerry. Canada’s Inovia Capital and Caisse de dépôt et placement du Québec later invested.

With the Accel financing came seasoned executive hires to help the company grow. One of those was Mr. Chauvet, who hails from France and had held senior sales and marketing roles for employers ranging from startups to France Telecom.

Mr. Chauvet joined as chief revenue officer but eventually added other responsibilities such as partnerships, mergers and acquisitions and product management.

“For me this is more of an evolution, there’s not much change to what I was doing, but I’m taking on more responsibility,” he said. After 10 years, “I feel Lightspeed is a piece of me, too; it’s my baby.”

With reports from David Milstead

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