Linx S.A. Strengths, Domain Expertise, and Key Differentiators
Linx Core product line provides integrated business management systems. Linx Core products cater to the entire retail chain, from business automation software that performs all necessary operations at the POS to comprehensive enterprise resource planning, or ERP, applications, which include, among other features, inventory management, customer relationship management, or CRM, tools, financial, accounting and tax management, product lifecycle management, supply management, loyalty programs, e-receipt and other interconnected features. By offering POS as a primary product, Linx is able to cross-sell many of its ERP capabilities by highlighting the seamless experience they provide. As of December 31, 2020, circa 70,000 retailers used Linx Core.
Linx Digital provides a Linx e-commerce platform designed to improve the omnichannel shopping experience, enabling retailers to engage, interact and transact with their clients and manage their inventories across physical stores in an integrated manner, mobile applications, and online channels. And also Linx Impulse: big data and machine-learning-based solutions for e-commerce operations, such as search and recommendation, re-engagement and advertising.
Linx Pay Hub provides payment processing solutions integrated with its Core and Digital product lines and provides Electronic Funds Transfer (EFT) services.
Linx Omni: OMS technology, which provides customers with an integrated tool to manage multiple distribution channels and inventories seamlessly. With this solution, a brick-and-mortar store can fulfil an order accessing the inventory of another store and deliver it to the client at home, for example, reducing stockout, improving customer experience and reducing logistics costs.
Linx S.A. Recent Developments
In 2020, Linx developed a simpler version of the Omni OMS called Omni Lite aiming to make it more affordable to mid-size retailers and had it piloting in a few clients. By using Linx Omni OMS technology, retailers can meet orders originating from any channel, regardless of where the product is located. Linx OMS product offers multi-channel purchasing processes that integrate stores, franchises and distribution centres, thereby providing a single channel for customers that decreases inventory shortage, generates more consumer traffic and increases sales. Through this solution, clients are able to manage: ship from store, ship to home, ship to store, pick-up in-store, click & collect, return in-store and showrooming.
Fast Farma is a white-label digital solution for drugstores, offering a fully integrated e-commerce platform and the possibility of integration with B2W´s marketplace, one of the most important marketplaces in Brazil. The project is cheap and fast, taking around 3 days from the signing to the website´s go-live. Linx also expanded with marketplaces to all customer bases (previously, only Omni OMS clients had access to it). On the payment solutions side, an increased commercial effort to develop Payment Links, which can be sent to the customer to make the payment for purchase via messaging applications and is already integrated with the store’s ERP.
In October 2020, Payments processor StoneCo, which counts Warren Buffett among its top investors, signed a definitive agreement to combine business with Brazil software firm Linx SA for about $1.1 billion. The combination makes sense as it marries the hardware, software and services that online and store-based retailers need, especially for omnichannel success.
The year 2019 was the first full year of operation for Linx Pay Hub, a product line created in October 2018 that added payment solutions to our product and service portfolio. Linx Pay Hub was established to serve the retail market through a platform offering high-quality payment solutions. Furthermore, Linx Pay total recurring revenue grew 10% year on year, and TEF accounts for 55% of the total revenue of Linx Pay. Linx Payment Link, on the other hand, side, saw its customer base double in size between May and June 2020, and we already have 2,500 customers using our solution that was recently launched. And finally, Linx QR Code increased its customer base by two folds when compared to December 2020.
Linx S.A. Mergers and Acquisitions (M&A) Activities
In January 2020, Linx acquired PinPag, a fintech specialized in means of payment that offers customized and disruptive instalment solutions for retailers. Later in February Linx acquired Neemo, one of the pioneers in customized delivery solutions through the integration of the establishment’s delivery application and its e-commerce platform, offering consumers an omnichannel experience. In addition, Neemo enables restaurants and their consumers to pick up orders at the store, place orders at the table using QR codes and by messaging services, such as Facebook Messenger.
In March 2020, Sback Tecnologia da Informação Ltda., or Sback, the operator of a cloud platform, was merged into Linx subsidiary Linx Sistemas e Consultoria Ltda. The merger of Sback did not require a capital increase or any changes to our Company’s shareholding structure.
In September 2020, Lix proclaimed the acquisition of CR Sistemas Ltda, or Humanus, subject to the payment of additional post-closing adjustments between 2021 and 2023. Founded in 1998, Humanus provides cloud-based payroll management and HCM software to midsize companies in different industries.
In November 2020, Linx published the acquisition of Mercadapp Soluções em Software Ltda, or Mercadapp, subject to the payment of additional post-closing adjustments between 2020 and 2022. Founded in 2015, Mercadapp provides a white-label platform for online sales solutions for small and medium-sized supermarkets. Its web platform and delivery solutions are cloud-based and its business model is based on recurring revenue (SaaS), combined with a transaction charge.
Through 2019, Linx acquired: Hiper Software, which allowed Linx to increase even more Linx Pay Hub’s addressable market with a differentiated value proposition by combining payment solutions with cloud management software for micro and small retailers, offered by channels with high distribution capacity; Millennium Network Ltda., which enabled them to strengthen the ecosystem with a highly scalable ERP solution for e-commerce in the SaaS model that allows the retailer, along with other technologies, to offer the consumer an omnichannel experience solution, thus a strong complementarity to existing Linx solutions; and SetaDigital, reinforcing the apparel vertical with a highly specialized ERP and POS solutions for the footwear retailers and enabling them to offer financial services (Linx Pay Hub) and Linx Digital products to the approximately 2,100 SetaDigital clients.
Linx S.A. Customers in ARTW Customer Database
Leveraging a rigorous data-centric research methodology, APPS RUN THE WORLD asks the simple question: Who’s buying Linx S.A. applications and why? And we provide the answers – supported by decades of research – to our clients around the world. Our Customer database has over 100 data fields that detail company usage of Linx S.A. and other enterprise apps by function, customer size, industry, location, implementation status, partner involvement, Line of Business Key Stakeholders and IT decision makers contact details. List of Verified Linx Core, Linx Digital, Linx Pay Hub, Linx Omni Lite customers.
Linx S.A. Overview
Ownership: - NYSE: LINX
Number of Employees: 3938
Linx S.A. Key Enterprise and Cloud Applications
Linx Core, Linx Digital, Linx Pay Hub, Linx Omni Lite
Linx S.A. Revenues, $M:
|Type/Year||2019||2020||YoY Growth, %|
|Total Revenues, $M||Subscribe||Subscribe||Subscribe|
|Enterprise Applications Revenues, $M||Subscribe||Subscribe||Subscribe|
|Cloud Applications Revenues, $M||Subscribe||Subscribe||Subscribe|
* Enterprise Applications Revenues = License + Support & Maintenance + SaaS
** All revenue figures are estimates based on public records, Cloud and Non-Cloud business models in Apps Run The World's vendor database, and annual survey results including vendor feedback.
Linx S.A. Revenue Breakdown By Type, $M:
|Type||License||Prof. Services||Hardware||Support & Maintenance||SaaS||PaaS||IaaS||Other (Non Enterprise Application Revenues)||Total|
|% of Total Revenues||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe||Subscribe||100%|
Linx S.A. Enterprise Applications Revenues By Functional Markets, $M:
Linx S.A. Enterprise Applications Revenues By Verticals, $M:
Linx S.A. Revenues By Region, $M
|Region||% of Total Revenues||2020 Total Revenues, $M||2020 Enterprise Applications Revenues, $M||2020 Cloud Applications Revenues, $M|
Linx S.A. Direct vs Indirect sales
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Linx S.A. Customers - Breakdown by Geo, Size, Vertical and Product
No. of Linx S.A. Customers: 70000
No. of Linx S.A. Enterprise Applications Customers: x
No. of Linx S.A. Cloud Customers: x
No. of Linx S.A. Cloud Subscribers: x
As of December 2019, Linx had over 70,000 retail clients across more than 100,000 storefronts. Among its customers are: Chilli Beans Brazil, Lupo S.A. (Brazil), Havaianas, Le Lis Blanc, Melissa, Inbrands, Rei do Mate, Habib's, Giraffas Brazil, ESPRESSO GRAIN - FRANCHISE, Boali Brasil, Bob's Brazil, Benjamin A Padaria, O Boticário, Natura Brasil, Yes! Cosmetics, Mundo Verde Brazil, OpenLaser Brazil, Ipiranga, Petróleo Brasileiro S.A., Raizen S.A., and many others.
Linx S.A. Market Opportunities, M&A and Geo Expansions
In addition to its own organic innovation capabilities, Linx has also increased its retail product offerings through strategic acquisitions of synergic businesses with their own operations, enabling Linx to further develop its product developing capabilities. From 2008 to March 2020, Linx completed 33 acquisitions.
In July 2017, Linx initiated its international expansion through the acquisition of Synthesis, a provider of POS, EFT and promotional software for large retail chains throughout Latin America. Synthesis has a significant presence in Mexico and Argentina, among other countries, and a customer roster that includes large retail chains in these markets, including Liverpool, Chedraui, Costco, Grupo Carso, YPF and Cencosud, among others
Their growth is supported by a strong track record of adding new products to its portfolio, including the most recent Linx Pay Hub integrated payment processing solution, in order to anticipate trends and adapt to changes in the market. These ongoing efforts are exemplified by the upcoming products that Linx launched in 2019, including a QR code acceptance solution at cash registers that replaces debit cards and a digital wallet for retail customers that do not want a checking account.
Linx S.A. Risks and Challenges
Linx acquired many businesses, products, services and technologies in the last couple of years. The integration process will be a challenge.
Linx may lose market share if competitors introduce or acquire new products that compete with Linx software and related services or add new features to their products or if new entrants emerge in the market.
Linx S.A. Ecosystem, Partners, Resellers and SI
Linx is continuously seeking and entering into strategic partnerships that enable customers to advertise their portfolios and expand their sales channels. For example, over the course of 2019 and 2020, Linx entered into strategic partnerships with marketplaces such as Ebazar.com.br Ltda., which operates under the trade name Mercado Livre (April 1, 2020), Rappi Brasil Intermediação de Negócios Ltda. (January 13, 2020). In addition, entered into strategic partnerships with e-wallets, including PicPay Serviços S.A. (January 10, 2020).
Linx S.A. Cloud Infrastructure Insights
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Data used in research reports are derived from publicly available documents, continuous surveys of applications vendors, customers, resellers, Independent Software Vendors, systems integrators and other verifiable sources.
Vendor shares and market forecast results are based on a combination of existing databases as well as demand side and supply side research conducted throughout the year with validation from vendors, customers, channel partners and documentations such as earnings releases and 10Q and 10K filings, vertical industry studies, regional and country-level statistics from public and private institutions(i.e. colleges, universities, government agencies and trade associations).
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