Shopify Began as a Snowboard Shop That Needed Better Software

Tobias Lütke was a German programmer who had moved to Ottawa, Canada. In the early days he lived in the home of his parents-in-law. In 2004 he and two partners, Daniel Weinand and Scott Lake, decided to sell snowboards online. They called the shop Snowdevil.

The hard part was the store itself. The founders were not satisfied with the e-commerce software available at the time, so Lütke, a programmer by trade, built his own. He used Ruby on Rails, an open-source framework for building web applications, and the shop launched after about two months of development.

2006: Selling the software instead

Snowdevil sold snowboards. But other people who wanted to sell online had the same problem the founders had faced, and Lütke’s software solved it. The founders shifted their focus from snowboards to e-commerce software and in June 2006 launched it as Shopify.

The idea was simple: anyone could open an online store without writing code, pay a monthly fee and start selling. Lütke stayed close to the technology. He became part of the core team of Ruby on Rails and wrote open-source code, including a payments library called Active Merchant.

Growing at a loss

Shopify grew steadily and spent heavily to do it. By the time it filed to go public, it had more than 162,000 merchants in about 150 countries. In 2014 its revenue more than doubled to $105 million, and merchants processed $3.8 billion in sales through it. It also lost $22.3 million that year, up from $4.8 million in 2013.

2015: The IPO

Shopify went public in May 2015 on the New York Stock Exchange and the Toronto Stock Exchange. It priced its shares at $17, above the range it had first planned, raising $131 million and valuing the company at about $1.27 billion. On the first day the shares rose about 51%, and Fortune put its value at the close at $1.92 billion.

2025: $11.6 billion

The company that started as a snowboard shop’s back office now runs online stores for merchants around the world. In 2025 Shopify’s revenue rose 30% to $11.6 billion, its first year above $10 billion, and its operating income was about $1.5 billion. Merchants sold $378 billion of goods through the platform. In the fourth quarter alone, revenue topped $3 billion for the first time, more than Shopify’s total revenue for all of 2020.

Most of that money no longer comes from monthly fees. Of 2025’s revenue, PYMNTS reported, about $8.8 billion came from merchant solutions such as payments, and $2.75 billion from subscriptions. Shopify earns more when its merchants sell more.

What the record shows

• The founders’ own problem was the market. They needed better store software, and so did thousands of other small sellers.
• The tool outgrew the shop. Snowdevil was a footnote; the software built to run it became the business.
• A share of sales scales with customers. Most of Shopify’s revenue now comes from payments and other services tied to merchant sales.
• Losses came first. Shopify lost money in the years before its IPO and later became solidly profitable.

Other companies in this archive grew out of a tool built for something else. Slack began inside a game company, and Twitter began as a side project at a podcast startup.