6-23-2025
At the Top
Top Pick Global-e (GLBE) reported earnings on 5-14-2025, and we shared the earnings review that day here:
GLBE – Q1 2025 – Shopify Deal Extension and Change
We spoke with the CEO afterward and have held it back as we waited for approval of the transcript.
Due to the ongoing war in Israel, we have a delay in that transcript so today I will share a summary of our chat.
As a reminder, all our CEO and CFO interviews for all companies are available on the Interviews Tab.
Please enjoy our one-on-one conversation with the CEO below.
One-on-One with the CEO of Global-e (GLBE)
Ophir Gottlieb:
I will start with, I think, two questions on Shopify, then I’ll go to your B2B2C or 3B2C, whatever we want to call it.
And then, maybe if there’s time, demand gen. But if not, then I think that’s what we’ll touch on. And then, I’ll always give you a chance at the end to say, “Hey, you didn’t ask the most important question.”
Okay, so with regard to Shopify, obviously, the partnership was extended for three years, and the news the market wasn’t in love with was this kind of bifurcation of sole ownership of it from 3P to 1P.
I know right now Shopify is about 5% of GMV, and there’s this kind of ramp up now with building it out, so okay, two questions.
Shopify Markets portion, like I said, was extended, remains exclusive. The 3P portion allows for some competition, which actually makes perfect sense, because Shopify’s going upstream, and it just… They wouldn’t tell a large enterprise, “Oh, you know, we would take you, but we can’t take your cross border.”
So, it makes sense.
Have you spoken about or can you talk about what portion of the 5% of GMV is from Managed Markets versus the 3P?
Amir Schlachet (CEO, GLBE):
• Shopify actually represents “considerably more than 5%” of Global-e’s GMV, not just the ~5% often cited.
• At the IPO, Shopify and Salesforce each drove roughly a third of merchant volume: “Shopify and Salesforce were about a third each, give or take.”
• Since the IPO, Shopify’s share has ticked up modestly: “Shopify’s share has increased … not super dramatically, but it has increased.”
• Today, most Shopify business runs via the traditional 3P integration: “the vast majority is currently on the 3P side,” reflecting long-standing direct merchant ties.
• The newer Managed Markets (1P) offering remains small but is expected to grow: “Managed Markets has only just relatively recently been launched,” and with the renewed agreement, they “hope … to drive that considerably higher over the next few years.”
OG:
Okay, so what’s your feeling about this 1P partnership? I know, let’s say to 2025 and 2024 to some degree, even though it launched then, is like building years.
As CEO, you’re looking at it, how large is this 1P Managed Markets thing potential for Shopify?
AS:
• The upside is “immense”—Shopify’s international GMV runs around $30–35 billion annually, and Global-e sees that as the addressable pool for Managed Markets.
• Roughly half (≈$15 billion) comes from a small number of large “Plus” merchants—better served by “white-glove” 3P solutions—while the other half stems from hundreds of thousands of smaller merchants.
• Managed Markets is positioned as the “first-person, seamless … one-click product” uniquely capable of tackling that broad, fragmented $15 billion segment.
• Both Global-e and Shopify doubled down on the vision by extending their exclusive partnership for three more years, committing to build “the next iteration of Managed Markets.”
• The goal: over the coming years, “capture multi-billion dollars of this GMV” on the 1P offering as it scales.
OG:
Okay, and a lot of that is just experiential, from being on Shopify and realizing, “Okay, we need this, this, and this,” even though you knew with MVP, you obviously didn’t have everything.
AS:
• They “nailed” the onboarding experience—merchants join via “a simple checkbox, a simple click,” and “many thousands of merchants” are already live.
• What they underestimated was the importance of a seamless day-to-day experience, not just sign-up: it “needs to work just like it does on their domestic store.”
• Today’s setup forces merchants to “manage two different systems”—money flows go straight to their bank instead of Shopify Payments, and they must “monitor two dispute centers.”
• The fix is a “complete shift in the modus operandi,” routing all money-flow and fraud processes through Shopify Payments so it feels entirely native.
• Both Shopify and Global-e are aligned on these learnings and will use their “new three-year exclusive agreement” to build the next iteration that eliminates this ongoing friction.
OG:
Okay, so you believe some of the growth is being held back because of the friction of a Managed Markets customer, which onboards very easily.
But now, they essentially also have two stores, that that’s actually slowing them down?
AS:
Yeah.
OG:
That is such a great friction that they’re trading less?
And Nir seemed to imply that now it’s kind of suddenly in focus. So it’s this idea that the merchants are embracing the reality of more complexity and volatility in the cross-border landscape.
So is the true that they’re now relying more on Global-e to quickly and efficiently sort of adapt to whatever happens.
So I think what Nir was trying to imply is in the short term there could be a revenue shortfall, but in the long term, this actually opens up a new addressable market. Is that how you see it?
AS:
• Merchants don’t necessarily sell less, but they “can’t tell if they’re trading more,” since international revenues bypass their Shopify Payments wallet and land via weekly ACH, making daily reports look smaller.
• For many smaller merchants—often solo entrepreneurs without a finance team—that complexity is “just too complicated,” driving them to disengage.
• In a self-serve model, “easy onboarding also means easy offboarding”—if it’s confusing, merchants churn without any hand-holding.
• Unlike enterprise clients who get guided support, these merchants face “no counterparty … all self-serve,” amplifying the friction.
• That operational confusion is “the key element that is inhibiting future growth,” and eliminating it is critical to unlocking the product’s full potential.
OG:
Interesting. Okay, in Q4, you and I think there’s mostly Nir or Ofer spoke about, on the one hand, that there was a shift to multi-local by some large customers, naturally the largest customers, to get around tariffs, which lowered revenue but not GMV for the full year. But on the other hand, I think it was Nir, he said that basically there’s a new market open to Global-e that expanded the total adjustable market.
First, can you tell me about the mechanics of the 3B2C? Is that a merchant ships, a consolidated wholesale shipment into Global-e’s local hub or affiliate? And then, legally, that’s a business to business sale, and then Global-e becomes the merchant of record for that inventory, and then duties and taxes?
And then, when a consumer places an order, Global-e sells from the local stock under the merchant’s brand, managing the checkout, et cetera? Or, how does it work? That’s how I see it in my head.
AS:
• 3B2C is “an in-between offering” blending cross-border and multi-local, without Global-e ever holding inventory or taking inventory risk.
• In the classic cross-border model, a UK brand sells to Global-e UK (B2B) then Global-e UK sells direct to the US consumer, who acts as the importer of record.
• The pure multi-local option requires the merchant to pre-stock inventory in market—Global-e then handles a domestic B2C sale, with tariffs paid on the wholesale value.
• 3B2C adds a third B2B leg: the UK brand first sells to its US entity (importing under commercial terms), that US entity sells to Global-e US, and then Global-e US sells B2C—“legally pass ownership three times.”
• This structure lets merchants “enjoy the reduced duties burden” of wholesale-rate tariffs without needing local inventory, simply by setting up a US legal entity.
• Physical shipment still ships from the UK, but by routing ownership through three B2B transactions, duties are optimized and the consumer checkout remains seamless.
OG:
Okay, yeah, so that’s like a digitization of removing complexity, but net, net, the package is just going from one place to the next.
AS:
• It won’t “completely remove the duties burden,” but it “reduces it quite significantly.”
• In categories like fashion, the “wholesale value can be half or even less of the retail value,” driving a meaningful drop in duties.
OG:
Yeah, jewelry, too. Yeah, it can be considerably less.
AS:
• Applies directly to brands sourcing from regions like China and Hong Kong—“inventory being manufactured in … China and Hong Kong.”
• Enables a substantial reduction in import duties without relocating production—“even before you move manufacturing elsewhere, this is a potential way to lower the duties burden considerably.”
OG:
Yeah, yeah, I saw some examples of something that maybe sells in the US for $40, but going through this route, it’s like tariffs on $10 worth of that product versus 40.
AS:
Yes, it can be massive. In fact, then we already have, I would say, a few brands that are live with that, and we’re seeing the impact.
OG:
So just tell me then, Amir, with respect to new customers or current ones, if you’re seeing this, so Nir was talking about there’s a new TAM opportunity with multi-local. 3B2C is that, but cooler.
Is that shaping up as you saw it? You look and say, “Yeah, actually, this is a bigger TAM”? How has the response been?
AS:
• Early traction is clear: “we are seeing some movement on that for sure.”
• It isn’t purely new TAM—“some of it … is potential longer-term TAM that is materializing faster,” as merchants opt for 3B2C instead of slower cross-border.
• Pipeline uplift is tied to tariffs: “positive movement in our pipeline … directly connected to the tariff situation.”
• Merchants on the fence now feel “this is just too much for us to handle … we’ll need somebody … to take this off our back.”
• The dynamic echoes Brexit-driven shifts: “Similar to the movement we saw … when Brexit became reality.”
• It’s a longer-term play—“it takes time to materialize,” but “we are starting to see the initial signs of it.”
OG:
Okay, the 3B2C thing was clever, though, I think. All right, so I’ll skip demand gen, just asking my ending question, is there anything I didn’t ask that I should have asked or anything you wanted to say but you didn’t say because I didn’t ask the right questions?
AS:
• Demand generation is finally “starting to pick up,” with “very, very encouraging early results,” even though it’s still “very early days.”
• The 3P side of the Shopify agreement also shifted—“that part of the agreement changed as well”—not just Managed Markets.
• Despite Shopify opening up to other providers, Global-e will “still remain the preferred provider for 3P.”
• To support Shopify’s push into enterprise, Global-e agreed to “pay a reduced revenue share to Shopify,” which they expect to be “neutral in terms of … the bottom line.”
• Long-standing partnerships need periodic tweaks—both companies “are very fast-moving,” so adaptations keep their “strategic partnership … constantly aligned.”
OG:
Okay, so improved revenue split is… Okay, that’s good on the 3P. Very nice.
AS:
Yep.
OG:
Okay, Amir, thank you so much. I will see you in August.
AS:
Thanks a lot, Ophir.
Conclusion
Today we reiterate Global-e (GLBE) as a Spotlight Top Pick. We see a bright future.
We see tariffs as adding complexity to the cross-border world and likely adding to the GLBE pipeline in the not too distant future.
The author is long GLBE at the time of this writing.
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