Toby Lutke is one of the richest Canadians with a net worth of $3.8 billion according to Forbes. He is the co-founder and CEO of a popular e-commerce platform called Shopify, which is the 11th largest company in Canada. It was not easy for Toby Lutke to establish the large tech company in Canada.
In this video, we will tell you how he started and what factors enabled him to reach where he is now. We at Business Chronicles tell the stories of extraordinarily successful people. Please subscribe to our channel to help us in making more videos. Toby Tobi Lutke was born on July 16, 1981, in Koblenz, Germany.
His father was an internist and his mother a teacher for children with special needs. He went to school in his hometown of Koblenz. At age 6, Lutke's parents gifted him a Schneider CPC, a German-brand home computer made by Armstrong CPC.
It had plenty of computer games in it. Lutke learned to code on the computer and by age 11 he was rewriting the code of the games in it, developing new ones. On top of that, he was altering the computer's hardware, taking apart a train to source new parts to rebuild the computer. At school, Lutke had authority problems and did not answer questions in exams as asked. Instead, he would deconstruct the questions teachers asked.
He also calculated the minimum amount of time he needed to attend class and graduate. Once he had the number, he would attend only those hours and spend the rest of his time on his computer. His parents worried about his obsession with the computer and even took him to see psychologists, but they could not diagnose any learning disabilities.
At school, Lutke's entrepreneurial side started showing. He would buy things in bulk and sell to other students at a markup. After grade 10, Lutke left school and joined an apprenticeship program at the Koblenzer Karl Benz School. The program was designed to produce the next generation of German programmers. During this time, he became frustrated with the restrictive coding language Java and adopted a liking to John Carmack's writings on computer programming and video game design.
Lutke enjoyed snowboarding. Once, on a snowboarding excursion to Whistler, British Columbia, Canada, he met a lady called Fiona McKean. They began a relationship and after Fiona graduated college, she moved to Germany with Lutke. At the time, Lutke worked with Siemens.
After one year, Fiona decided to return to Canada to earn a master's degree. Lutke followed her, moving to Canada in 2002, aged 22. Siemens paid for his move to Ottawa. In Canada, Lutke considered getting a job but could not as he had no work permit.
Fortunately, he could start a business in Canada. He gravitated to his passion snowboarding and decided to start a business selling snowboards online. For this new venture, he partnered with Scott Lake, a friend of the McKean family.
Lake already had a background working in a startup. The two launched Snowdevil in 2004. Lutke created the e-commerce website for Snowdevil himself, relying on an open-source framework named Ruby on Rails. Once the site was up and running, they networked with small snowboard companies that sold high-end snowboards and convinced them that they could sell them online.
Lutke enjoyed selling. He would call suppliers to negotiate rates and then optimize the site to get more customers. The business made a profit. However, in the spring of 2005, Lutke realized he was spending most of his time tweaking the software that ran the e-commerce store and making additions such as a gateway to processing credit cards.
He was putting in plenty of effort, but the software was just not as good as he wanted. Lutke was a natural builder. Since his childhood days, he enjoyed deconstructing things and rebuilding them. He did the same with his e-commerce site and as he did that, shared some of the improvements with the Ruby on Rails community, eventually becoming one of its core group of developers. It was during this time that he and Lake realized there was a demand for good software to power e-commerce stores.
They decided to build it. In 2006, Lucky and Lake raised $200,000 from friends and family and started a new company called Jaded Pixel. They called the software product they were selling Shopify.
the two brought in three additional staff including daniel winand a programmer and then rented an office on top of a coffee shop on elgin street lucky was ceo of the new company initially they made money by charging a commission on the revenue generated by businesses that use their software however they shifted this to a monthly subscription model in the early 2010s in october 2006 the business made eight thousand dollars in revenue The first two years of Shopify were exhilarating but also filled with uncertainty. The co-founders ran the business and made revenue, but it was not profitable. Cash flow was tight, and they almost ran out of money. Thankfully, their early investors helped out.
Lucky's in-laws, in particular the Mckean, were very helpful. His mother-in-law handled accounting and payroll, while his father-in-law sometimes paid staff. Shopify's big break came in 2008. At the height of the financial crisis, as more people got out of their jobs, they started opening online stores to sell products and earn a living. This trend gave Shopify a windfall of new customers.
They added more staff and strengthened their software capabilities. In 2009, Lutke released an application programming interface. This allowed developers to build applications on top of the Shopify platform and then sell the apps on the Shopify App Store, also launched that year. That 2009, stores running on Shopify grossed $100 million in sales. In 2010, Lutke launched a mobile app for Shopify store owners.
He also raised headcount to 20, and Shopify was named Ottawa's fastest-growing company by the Ottawa Business Journal. In December 2010, Lutke realized he needed to raise funding to support Shopify's growth. That month, he led it to raise $7 million in a Series A venture funding round. In 2011, Shopify hit 15,000 stores from 80 countries.
Growth was accelerating and Lutke found himself in need of additional financing. In October, he led the company to raise another $15 million in funding from companies such as Bessemer Venture Partners, Felicis Ventures, and Firstmark Capital. In 2012, Shopify was recognized as a finalist in the Startup of the Year award by Canadian Startup Awards. Lutke himself was a finalist for Entrepreneur of the Year. Profit magazine named Shopify Canada's smartest company, and it ended the year having onboarded 40,000 stores in 90 countries.
These stores made revenues of $740 million. In 2013, Shopify acquired a business called Jet Cooper. Later, it released Shopify Pay, allowing merchants to efficiently accept credit card payments. In December 2013, Lutke led Shopify to raise $100 million in a Series C round. In 2014, the Globe and Mail named Lutke CEO of the Year.
Shopify hit the 100,000 retailers mark and earned $105 million in revenue. Employee headcount reached 500. In 2015, Shopify announced 140,000 stores selling $3.7 billion worth of products. In April that year, Lutke led the company to list concurrently on the Toronto and New York stock exchanges. Its offer price was put at $17 but went up to $28 during trading.
Shopify raised $131 million from the IPO. In 2016, Lucky led Shopify to acquire product design firm BoltMaid and mobile product development studio TinyHearts. That same year, Shopify released Frenzy, an app that supported flash sales, and Shopify Capital, a cash advance service. In 2017, Shopify partnered with Amazon, enabling its merchants to sell on Amazon. Two years later, its employee count reached 5,000.
In 2020, Shopify announced it was going fully remote. In 2021, its sales hit $4.9 billion. As of 2022, Shopify has millions of merchants from 175 countries selling on its platform. The merchants handle about $590 billion in sales. Shopify has more than 10,000 employees and there are over 8,000 apps built on its platform.
Lutke retains a 6% stake in Shopify, giving him a net worth of $3.8 billion as of December 2022. Lutke sits on the board of Canada's Learning Code. The organization seeks to spread digital literacy in Canada. He previously chaired the Board of Digital Industries table, which was put together by the Canadian federal government.
to advise leaders on how to make the country a digital leader. His contributions to Canada's tech sector earned him the Meritorious Service Cross in November 2018. Lutke advocates for environmental sustainability and education. In 2019, he donated $1 million to Team Trees, an initiative that supported the Arbor Day Foundation.
In 2021, he donated $1.2 million to Team Seas. an initiative that supported the Ocean Conservancy and the Ocean Cleanup. Lutke and his wife are the principal founders of the Thistledown Foundation. He seeded the foundation with $150 million capital to go toward environmental initiatives. However, at the height of the COVID-19 pandemic, he channeled some of these resources to healthcare.
For example, the foundation gave $5 million to go toward COVID-19 research. and 26 million dollars to 13 acute care children's hospitals in canada in the 1980s there was no awareness of computers especially in germany toby lucky was lucky that his father at the age of six got him a computer and at the age of 11 he learned coding his passion for coding and programming later helped him to create one of the most popular e-commerce platforms thank you for watching our video subscribe to our channel to watch more videos like this