By Alexandra White

Squarespace is planning a blitz of mergers and acquisitions in the future, as it develops its e-commerce business.

“We’ve had a really positive experience with M&A and with joining with these small teams,” said Anthony Casalena, CEO of Squarespace at the Wall Street Journal Tech Live Conference on October 20th. “I absolutely think that we’ll be pursuing more of that.”

The 18-year-old website building and hosting company had not made any acquisitions until three years ago. In 2019, it acquired appointment scheduling company Acuity Scheduling and Unfold, a social media editorial company. This year, Squarespace acquired Tock, a reservation, delivery and takeout software, in April of this year. The acquisitions have allowed Squarespace to offer new software to provide more services and products to target small businesses and expand its e-commerce footprint. 

The company has been in the e-commerce space for about ten years, but only 20% of its revenue comes from e-commerce. Squarespace was founded as a website building and hosting company, and 80% of its revenue still comes from these services.

The company is not planning to compete with Amazon or other E-commerce giants because it is targeting small businesses that sell services rather than products. 

“Physical commerce is important, but we think there’s a huge opportunity for people out there selling services,” said Casalena.

Although Squarespace has a physical commerce platform, many of the customers who are attracted to Squarespace are service-oriented businesses like yoga studios, hair salons, designers and photographers. 

The company recently introduced eight new updates in September to court small businesses. It introduced tools for selling products, taking reservations, making orders, selling exclusive content, booking appointments and web design. It also introduced new updates for small businesses, who are digital creators, to easily create social media posts in advance and optimize link in bio pages on sites like Instagram and Twitter. Most of the updates were possible because of their recent acquisitions of Tock, Acuity Scheduling and Unfold.  

The pandemic was good for Squarespace’s business and the company had a 28% revenue boost, reporting $621.1 million in revenue in 2020. Investors were optimistic when Squarespace went public last May through a direct listing, but it ended up falling short of investor expectations. 

The stock opened at $48 but fell 13% to $43.65 on the first day of trading. Since May, the stock has fallen almost 28% trading at $39 a share.

“The investor optimism around the pandemic beneficiaries started to wane and that reflects in Squarespace valuation and investor sentiment,” said Ken Wong, an analyst at Guggenheim Partners.

Still, Wong sees an opportunity for Squarespace to grow its business through e-commerce and said that the company’s recent acquisitions will continue to deliver more value to its customers. 

“It does create a situation where longer term they can get higher average subscriptions per customer, “ said Wong. “It also opens up the funnel to more businesses being receptive to building their website on Squarespace.”

The company has acknowledged that it is still in a growth phase, but it expects to continue to grow post-pandemic as it focuses on strengthening its e-commerce business.

“I think we’re in the early days,” said Casalena. “I think the success of some of our competitors proves there’s demand for products from independent brands.”