SecProbe.io

March 17, 2015

Via E -mail
Tobias Lütke
Chief Executive Officer
Shopify Inc.
150 Elgin Street, 8th Floor
Ottawa, Ontario K2P 1L4
Canada

Re: Shopify Inc.
Draft Registration Statement on Form F -1
Submitted February 18, 2015
  CIK No. 0001594805

Dear Mr. Lütke:

We have reviewed your draft registration statement and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR.  If you do not believe our comments app ly to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.

After reviewing the information you provide in response to these comments and your
amended draft registration statement or filed regis tration statement, we may have additional
comments.

General

1. Please supplementally provide us with copies of all written communications, as defined
in Rule 405 under the Securities Act, that you , or anyone authorized to do so on your
behalf , present to potential investors in reliance on Section 5(d) of the Securities Act,
whether or not they retain copies of the communications.

2. We will process your submission and amendments without price ranges.  Since the price
range you select will affect disclosure i n several sections of the document, we will need
sufficient time to process your amendments once a price range is included and the
material information now appearing blank throughout the document has been provided.
Please understand that the effect of the  price range on disclosure throughout the
document may cause us to raise issues on areas not previously commented on.

Tobias Lütke
Shopify Inc.
March 17, 2015
Page 2

 Prospectus Cover Page

3. Here and in the summary, please disclose that there will be two classes of authorized
common stock outstanding after the offering - Class A subordinate voting shares and
Class B multiple voting shares - and briefly describe the different rights between the two
classes.  Also, in t he Summary, disclose the aggregate voting power of each class of
common stock following the offering.

Table of Contents

4. Please move all the information that immediately follows the paragraph disclosing a
dealer’s prospectus delivery obligation to the e nd of the risk factors section or another
appropriate portion of the body of the prospectus.  The summary should immediately
follow the page with the table of contents.

Industry and Market Data, page ii

5. We note your statement in this section that while y ou believe the market position, market
opportunity and market share informatio n included in the prospectus is “ generally
reliable,” such information is “inherently imprecise.”  As you know, the company is
responsible for the entire contents of the registra tion statement and should not include
language that can be interpreted as a disclaimer of information contained in the filing.
Please revise accordingly.

Prospectus Summary

Overview, page 1

6. Please tell us your basis for the leadership claim in the first  sentence.

7. Refer to the disclosure in the last paragraph where you disclose year -over-year merchant
growth.  Please disclose here and on page 87 the time period for this calculation.

Industry Overview and Market Opportunity, page 2

8. Regarding the informa tion from third parties cited in your prospectus, such as the data
provided by AMI Partners and Forrester Research, please tell us whether any of the data
was prepared for you or for the offering.  Also, provide us with supplemental copies of
the reports t hat you cite and from which the data in the prospectus is extracted.  Mark the
reports appropriately to designate the portions you rely upon in making the statements in
the prospectus.

Tobias Lütke
Shopify Inc.
March 17, 2015
Page 3

 Risk Factors

We use a limited number of data centers…, page 19

9. We no te your reliance on your two third -party data center facilities from the disclosure in
this risk factor and in your Business section.  Please file a copy of any agreement relating
to your leases of these facilities or tell us why you believe that they are not required to be
filed.  In addition, with regard to the disclosure in the last paragraph, expand to include
the termination date of the agreements.

Risks Related to this Offering and Ownership of our Class A Subordinate Voting Shares, page 34

10. You disclose in the first full paragraph on page 35 that Mr. Lütke may control a majority
of the combined voting power of your Class A and Class B shares.  Please tell us whether
you expect to be a controlled company as defined by the exchange on which you  will list
your shares and if so, include a risk factor that discloses the corporate governance
implications of being a controlled company.  Also include succinct disclosure of your
controlled company status on the prospectus cover page and in the Prospect us Summary.

11. We note your disclosure immediately below the bullet points on page 134 that you will
have an unlimited number of Class A and Class B shares authorized upon completion of
this offering.  Please add a risk factor that highlights the risks of di lution as a result of
shares issuances from the unlimited number of authorized shares, including if applicable,
the ability to issue such shares without a shareholder vote.

Provisions of our charter documents…, page 43

12. Please expand to disclose that you are authorized to issue and unlimited number of
preferred shares as well as the attendant risks.

Use of Proceeds, page 48

13. In the third paragraph, you disclose that you may use proceeds to fund your growth
strategies and mention a number of specific uses.   Please disclose the net amount of
proceeds for each intended use.  Refer to Item 3.C.1 of Form 20 -F.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview, page 57

14. You disclose in the third full paragraph on page 57 that you expect international revenues
to increase as a percentage of total revenues.  According to the table at the top of page 65,
revenue derived outside the United States has decreased as a percentage of total revenues
for the fiscal year ended  December 31, 2014.  Please expand your disclosure on page 57

Tobias Lütke
Shopify Inc.
March 17, 2015
Page 4

 or elsewhere to discuss the reasons for this decrease despite your efforts to diversify
internationally.

Cost of Revenues

Cost of Revenue Solutions, page 61

15. We note your disclosure regarding the decrease in gross margin percentage on merchant
solutions; however, the gross margin percentage on subscription solutions for the fiscal
year ended December 31, 2014 appears to have decreased as well.  Please provide a
discussion of the reason for the decrease and any steps management is taking to address
this challenge.

Liquidity and Capital Resources, page 74

16. Regarding the credit facility you discuss beginning on page 74, please file a copy of the
agreements related to the credit facility or tell us why you believe that they are  not
required to be filed.

Critical Accounting Estimates

Stock -based Compensation

Stock Valuations, page 80

17. We note your disclosure that given the absence of an active market for your shares prior
to your initial public offering, the fair value of the shares underlying stock options was
determined by your board of directors.  Please r evise to disclose that the estimates will
not be necessary to determine the fair value of new awards once the underlying shares
begin trading.

Business

Overview, page 86

18. Please explain in your disclosure how you concluded that the Shopify platform can
process at least 10,000 requests per second and disclose any significant assumptions.

19. Where appropriate, please describe the key terms of your agreement with Stripe Inc.

The Opportunity, page 90

20. You appear to use the number of merchants and annualized revenue per merchant, which
you disclose in the first paragraph of this section and on page 3, as a business metric.

Tobias Lütke
Shopify Inc.
March 17, 2015
Page 5

 Please disclose comparable information for prior interim and fiscal periods and provide a
discussion of any trends.  Also consider expandi ng your disclosure on page 58 under
“Performance Indicators.”

Technology, page 95

21. Please disclose the basis for your belief in the fourth bullet point on page 95 that median
response times were much lower than average.  Quantify if possible.

Our Merchan ts, page 96

22. With regard to the disclosure in this section, please include the method used to select the
merchants that you discuss.  In addition, we note that in many instances, your disclosure
suggests that a positive outcome was as a result of the merch ant’s use of your product.
For example, you disclose:
 In the first bullet point on page 96 that after implementing Shopify POS, the
company’s monthly sales increased 250% and 100% the following year.
 In the second bullet point on page 96 that when Black M ilk Clothing launched
their Shopify platform and started  worldwide shipping, the brand quickly became
popular.
 In the last bullet point on page 97 that after DODOcase launched its business with
Shopify, their sales increased to $3 million.

To the extent t hat the positive outcomes you describe could be attributed to other factors,
please revise to clarify.  Otherwise, please describe with greater specificity how Shopify
was solely responsible for the positive outcomes you disclose.

23. Refer to the first bulle t point on page 97.  Please note that where you include a hyperlink
or a URL to a website in your disclosure you assume responsibility for that information.
Please file this information or revise to remove the URL.  Refer to footnote 41 of SEC
Release No.  34-42728 (May 4, 2000).

Facilities, page 101

24. Please describe the terms of the lease incentives under your agreement for the Ottawa and
Toronto properties, including any material conditions attached to the incentives.

Certain Relationships and Related -Party Transactions, page 130

25. Please clarify what you mean in the last sentence by “except for routine indebtedness as
defined under applicable securities legislation” and tell us whether such indebtedness
meets the definition of a related party tr ansaction under Item 7.B of Form 20 -F.

Tobias Lütke
Shopify Inc.
March 17, 2015
Page 6

 Principal Shareholders, page 131

26. In the second paragraph, please include as part of your definition of “beneficial owner”
the power to receive the economic benefit of ownership of the securities.

27. Refer to footnote (3) on page 133.   Disclose the natural persons that have voting or
investment power over the shares held by Klister Credit Corp.

Description of Share Capital

Registration Rights, page 140

28. We note that your exhibit index only includes the Fourth Amended  and Restated
Investors’ Rights Agreement.  Please include a discussion of the terms of this Rights
Agreement or advise .

Taxation, page 152

29. Item 601(b)(8) of Regulation S -K requires a tax opinion  to be filed “where the tax
consequences are material to an investor and a representation as to tax consequen ces is
set forth in the filing. ”  Please advise whether you intend to file a tax opinion .  We may
have additional comments.

Underwriting, page 157

30. Please disclose the number of shares subject to the lock up agreement and provide
equivalent disclosure in the  risk factor on page 37.

Consolidated Financial Statements

Notes to Consolidated Financial Statements

Note 3. Significant Accounting Policies

Segment Information, page F -8

31. Please tell us what consideration was given to separately disclosing revenues generated
from the sales of POS hardware, themes, applications, and domains.  Refer to ASC 280 -
10-50-40.

Revenue Recognition, page F -8

32. We note on the company’s web -site description of the Shopify Partner Program that a
theme designers can earn up to 70%  of each sale they make on the Shopify Theme Store.

Tobias Lütke
Shopify Inc.
March 17, 2015
Page 7

 Please tells us the following with respect to sales of themes:

 Quantify the amount of revenue generated from the sales of themes for each period
presented;
 Describe the process and the parties involved;
 Identify who is ultimately responsible for providing the service /product  to the
customer;
 Describe the nature and level of risk borne by the company;
 Describe how pricing for theme sales is established;
 Describe how the payment to theme designers is esta blished. For example, clarify if
the fees are a percentage of amounts charged for the theme sold;
 Quantify the typical percentage or range of percentages of fees paid to a theme
designer relative to the price paid for the purchase of a theme; and
 Describe your analysis of all factors in ASC 605 -45-45.

33. We note your disclosure that revenues from the sale of Themes, Apps and Domains are
classified within Subscription solutions because they are typically sold at the time the
merchant enters into the subscription services arrangement or because they are charged
on a recurring basis.  Please revise to disclose your revenue recognition policies related to
multiple element arrangements and to provide the disclosures required by ASC 605 -25-
50-2.

34. Related to sales of Themes, Apps and Domains, please provide us with your analysis that
these are separate units of accounting based on ASC 605 -25-25-5.  As these products
appear to be utilized by the merchant in conjunction with the subscription, describe for us
your basis for recognizing the revenues at the time of the sale.  Refer to ASC 605 -10-25-
1 and SAB 13.A.1.  Please provide us with a similar analysis for your sales of POS
hardware.

Note 16.  Earnings Per Share, page F -26

35. We note that you present pro fo rma net loss per common share calculated assuming the
conversion of all series of the company’s convertible preferred shares into common
shares.  Please revise to also reflect the impact of the redesignation of common shares as
Class B multiple voting shar es, which will occur immediately prior to the consummation
of this offering.  Revise to describe how the ratio will be determined for the redesignation
and to address consideration of the two -class method.  Refer to ASC 260 -10-45-59A
through 45 -60B.

Tobias Lütke
Shopify Inc.
March 17, 2015
Page 8

 Part II

Item 7.  Recent Sales of Unregistered Securities, page II -2

36. Please revise to disclose the date of sale for each transaction.  In addition, please ensure
that you have disclose d the aggregate offering price or nature and aggregate amount of
consideration received for all securities issued without registration.  Finally , identify the
exemption you relied upon for each transaction  and disclose the facts relied upon  to
support the claimed exemption.  Refer to Item 701 of Regulation S -K.

You may contact Joyce Sweeney, Staff Accountant, at (202) 551 -3449 or Patrick
Gilmore, Accounting Branch Chief, at (202) 551 -3406 if you have questions regarding
comments on the finan cial statements and related matters.  Please contact Gabriel Eckstein, Staff
Attorney, at (202) 551 -3286 or, in his absence, the undersigned at (202) 551 -3456 with any other
questions.  If you require further assistance, you may contact Barbara C. Jacobs, Assistant
Director, at (202) 551 -3730.

Sincerely,

 /s/ Matthew Crispino

 Matthew Crispino
 Staff Attorney

cc: Via E -mail
Margaret A. Brown, Esq.
 Skadden, Arps, Slate, Meagher & Flom LLP