Good morning, everyone, and welcome to Global-e's 2025 Investor Day. Thank you very much, all, for coming, both in person and virtually. As management is going to be making forward-looking statements during today's presentation, I wanted to take a moment just to pause with our Safe Harbor statement. Great. We have a lot of great speakers today. I'll make my way through the agenda very quickly, and then we can move on to the real stuff. Starting off the morning is going to be Amir Schlachet, talking about Global-e's vision and roadmap. We're then going to move to Yehiam to talk about product and technology, and then Nir will discuss Global-e's go-to-market strategy. After a brief break, we'll have Matt walk through a customer panel with FIGS and Kith talking about the partnership with Global-e for global growth. After that, Ofer will move on to financial strategy for Global-e.
At the end of the event, we'll actually open it up for Q&A with management. With that, I'll turn it over to Amir Schlachet, CEO of Global-e.
No, I don't need a heart. Thanks, Mike. Yeah, sorry about my last name. Oh,
thank you.
For everybody who doesn't know me, I just go by Amir. Don't try pronouncing my last name. Thank you all for coming, as Mike said. It's great to see you all on this great weather day here in New York, both in person and on the webcast. I want to start the day off. We have a lot of materials prepared for you guys, but I want to start off by taking you through kind of just high-level the Global-e story because I know not everyone is fully versed in the story. Some people are a bit newer to it. I actually want to start top down. As you all know, probably our mission at Global-e is to power better global e-commerce.
If you look at the e-commerce market, it's actually steadily gaining share out of total retail. This is probably no surprise for all of you. You all feel that probably in your normal lives as more and more consumers over time move to shopping online and more and more brands move to relying on online sales as their main strategies. You can see that on the graphs for more than a decade now, e-commerce is steadily gaining share out of total retail. There was an acceleration during COVID with store closures, then normalization in 2022 with the reopenings. Overall, if you look at the graphs, you see that it's a very clear and secular trend of moving to online.
When you dive one layer deeper and you look at global direct-to-consumer online, which is kind of the holy grail for any brand out there, brands immediately face a very complicated maze of problems and issues and barriers that prevent them from being able to transact directly with those consumers worldwide. As soon as they need to sell to someone outside their domestic market, all of a sudden, everything becomes complicated. Everything, every aspect of the transaction becomes a barrier. The reason why it's so hard for them to do that is just look at what it takes in order to localize the consumer experience for a single market. In this example, it can be a U.S. retailer or a U.K. retailer for that matter trying to sell to the Netherlands, which is a very big and important e-commerce market in Europe.
All of a sudden, they need to change almost every aspect of the experience on their site. They need to cater to the local language. They can get by with English in the Netherlands, but at least the important bits need to be localized. Marketing messaging and the checkout need to also be provided in local language. They need to price everything correctly in euros as a local Dutch consumer would expect. They need to support local payment methods. If you try to sell to Dutch consumers and you do not support iDEAL and Klarna, you are basically missing out on more than two-thirds of how Dutch consumers are used to paying online. You need a good shipping offering. Sorry. You need a good shipping offering at an attractive price, and you need to support the European and the Dutch-specific import regulations, duties, VAT, and so on.
That's just for a single market, and even that is a moving target because look on the right side on all the recent and expected changes in import regulations and duties and taxes regimes. We're all kind of focused here in the U.S. about the recent changes in tariffs, but this is not unique to the U.S. Yes, maybe it's making a lot of headlines now, but regulations change on a regular basis. Countries change their VAT rates, their import regime, their low-value goods tax regime all the time. As a merchant, you need to stay compliant and you need to be up to date. That's just a single market. If you now multiply it, if you want to sell globally, multiply that complexity by 50 markets or 100 markets or 200 markets, it's virtually impossible to do as a merchant. There's no one-size-fits-all here.
The consumer preferences, local regulations, and requirements are vastly different if you want to sell to a Brazilian customer or to a Swiss customer or to a Japanese customer. There is no one-size-fits-all. You can't do it just by yourself. What that means is that brands are just not realizing their global direct-to-consumer e-commerce opportunity. They know that because they look at their traffic patterns. The average brand that has some brand equity will have a hefty chunk of its traffic coming from non-domestic markets, sometimes as high as a third or even more of its traffic because of the way they build their brand today. All relying on social media, social marketing influences. It's all global by design.
When it comes to their bottom line, the share of actual sales to international consumers is typically far, far less than their share in traffic because of all these barriers and issues. This is exactly where Global-e comes in. What we've built is a full end-to-end platform that solves these problems in one go for both sides. For the shoppers, we provide a seamless, fully localized consumer experience right there on the brand side. At the same time, for the merchant, we increase conversion rates and we reduce and remove all the risks and complexities that are typically involved in selling internationally.
The way we do it, the way we simplify this experience for both sides is via a full end-to-end comprehensive platform and set of services that we integrate or allow our brands to integrate to via a single integration through which they get access to all the necessary capabilities and services. Once they are integrated, once our solution is integrated and live on their existing store, they get full access to all the deep localization capabilities that are required in order to create that seamless shopping experience on their site. Out of the box, their site now supports local messaging in more than 30 different languages, more than 100 different currencies, more than 150 different payment methods, so shoppers can pay just like they're used to paying domestically.
We pre-calculate and guarantee the duties and taxes, so there are no surprises for the merchants or the shoppers upon delivery. We work with a network of more than 20 different carriers in order to provide multiple shipping options at different service levels at attractive prices. We facilitate easy local returns in case shoppers need to return something. As I said, we de-risk the transaction. We take the fraud risk upon ourselves. We take the duties and taxes risk. We take the foreign exchange risk on returns. For the merchants, it becomes just as easy as selling domestically. We actually do not stop there because apart from all these advanced and sophisticated capabilities, we also have another thing. We have a lot and lot of data.
As we SCAYLE up and as we work today with more than 1,400 enterprise merchants and many more on managed markets on Shopify, and we transact more than tens of millions of transactions a year, billions of users' interactions all around the world, that very diverse and very broad set of data allows us to create very, very meaningful insights for our merchants. We basically slice and dice all this data, feed it through very sophisticated statistical algorithms that enable us to take a certain merchant situation. It can be a new merchant.
It can be an existing merchant and provide data-driven, very kind of curated, we call them Smart Insights that take into account the vertical that they're in, the price point, the origin and destination market, and other parameters in order to provide very specific, very curated advice that tells our merchants not just what they can do with all these capabilities that we bring to them through our platform, but actually what our data shows that they should do and exactly how they should configure all the elements of the international shopping experience on their site in order to have the optimal conversion rate and take advantage of that international opportunity. When you combine that kind of capabilities and know-how, you get a very, very seamless, fully localized customer experience right there on their site.
From the moment the shopper enters a globally enabled website, our technology will recognize where they're coming from based on the IP address, or they can also switch that manually, and they'll get greeted into the site with marketing messaging in local language that is customized based on our data that shows what works best in that specific situation in order to reduce bounce rates. We will then localize the entire browsing experience on the site with localized pricing and product availability. We localize the entire checkout experience, offering the full landed cost, inclusive of all the duties and taxes, shipping, and so on. There are no surprises for the shoppers. They know exactly how much they're going to pay. I mentioned earlier, we work with a wide network of carriers so that we can offer multiple modes of shipping at attractive prices.
We can let shoppers self-select those that care more about time versus those that care more about price of shipping, and also those that prefer to use one of our specialized shipping methods like cash on delivery, like delivery to drop-off points, all depending on what we know, again, from our data that consumers prefer in that specific market. We then let them pay using their preferred local payment method. We do not stop there. We support also the after-sale experience in case they need some help. We provide multilingual customer services, and we facilitate returns through a fully managed returns process and returns portal. A full end-to-end solution. That set of capabilities, that value that we are able to deliver to our merchants and their consumers worldwide is really what has propelled our tremendous growth since inception.
We started a company in 2013, Shahar, Nir and myself, with nothing, just an idea. Now, some 12 and a bit years later, we're here trading, expecting to trade this year more than $6 billion for our merchants on the platform, generating close to $1 billion in revenues, continuing to grow fast and have all this growth done in a very durable and scalable way as we generate cash and a high adjusted EBITDA margin. That success is, of course, thanks to the thousands of different merchants that have basically chosen Global-e to be their partner and to enable their international direct-to-consumer sales, including some of the world's most iconic brands.
We have two of our favorite brands joining us today for a panel later on, but I think you can recognize here many different brands across different verticals, different price points from luxury to everyday fashion, different types of merchants from kind of established brands that have transformed into the digital world and like Adidas or Hugo Boss and are now moving to the next stage to direct-to-consumer internationally using Global-e. All basically, you name the brand, the vertical that they're in, the type of merchant that they are, we can add value to them and help them to fulfill their own goals of going global and selling direct-to-consumer around the world. I think the reason, or the fundamental reason why these brands trust us with their global sales is because our business model is tightly coupled to their success.
We work on a success-based model, so the only way we can generate revenues is by enabling our merchants' sales around the world. You can see that when you look at our tremendous revenue growth that grew almost seven times since our IPO and how tightly it's coupled to the growth of GMV, which is essentially the sales that we enabled for our merchants. In order to maintain that value generation for our merchants that is at the basis of this fully aligned business model is our technology. In order to achieve that, we keep investing and reinvesting in building additional capabilities, sharpening our existing capabilities, adding more operating models, adding more optionality to our platform that enables us to cater to more and more merchants around the world and more and more merchant situations. You can see that from our investment in R&D.
Yehiam, our CTO, is going to dive a little bit deeper into that in the next session. If you just look at our investment in R&D, which has grown seven-fold since the IPO, I think it speaks for itself. At the same time, we operate on a very, very efficient operating model, and we keep our eye always. We do not just want to grow for the sake of growth. We want to make sure that we build a long-standing, sustainable business model that is built on profitable growth, on durable growth, and on cash generation. That is evident, I think, from the fact that from the IPO, we have managed at the same time that we grew seven-fold revenue-wise, we are actually able to expand our adjusted EBITDA margin from just 9% at the time of IPO to 20%, which is what we expect to do this year.
We've actually reached the 20% on a quarterly basis in Q4, and in 2025, we expect to do that on an annual basis. What drives this success? What drives the value creation that our platform provides for our merchants? At the basis of it, and I mentioned it briefly earlier, is a full end-to-end comprehensive tech platform that we've built that takes care of all the different needs and requirements that are there in order to localize that shopping experience for the consumers and for the merchants alike. On top of that broad set of capabilities, we add data models using AI and machine learning and integrate that via APIs to external providers as well in order to provide that layer of applications that powers each and every element, each and every capability out of those that I mentioned earlier that together form that fully localized experience.
On top of that, we add go-to-market elements such as demand generation, such as those Smart Insights that I mentioned in order to deliver the true value for our merchants to grow their business. That tech sits in the middle and orchestrates all that we do, and that's connected to a very, very broad and growing set of Tier 1 providers out there that are integrated into our platform via hundreds of APIs and together form the ecosystem that enables all of our services. It starts from the e-commerce platforms. As you are all aware, we have integrations into pretty much any e-commerce platform out there. There's, of course, our long-standing and successful partnership with Shopify. We have great integrations and relationships with all the other leading platforms from Salesforce Commerce to Magento to BigCommerce, etc.
Those of you that were around at the time of our IPO maybe remember this slide, and you'll notice that there are many more logos on this slide because we keep adding more and more providers, more and more such integration. I think a recent one is SCAYLE, a fast-growing, successful e-commerce platform that, through integrating with SCAYLE and partnering with them, we got two very exciting deals already, Harrods and Manchester United, two great, relatively new clients of ours. Same is true for payment providers. We keep adding integrations to additional payment gateways in order to create both redundancy and capabilities and performance on the payment side, additional carriers to better our logistical reach and performance, and so on and so forth.
Now, the combination of investing in our technology and constantly expanding the ecosystem of partners that we work with is really what drives our innovation all across the board, all across the different elements of our offering from the very beginning, from the relatively new demand generation capabilities that we went live with, Borderfree, which you have an example here is one of them. Nir will talk a little bit more about that later on. Excuse me. To adding, as I mentioned, additional capabilities around payments, additional optionality, and sophisticated logistics offerings through to investments in better and better risk management models for the sake of our merchants, and of course, keeping us and our merchants always fully compliant with local regulations, with local duties, taxes, tariffs, etc., all the way to completely new operating models.
If it's the relatively new Multi-Local offering that we added just a few years ago, if it's support for digital goods, which we are enabling as we speak, and of course, many capabilities that are starting to rely more and more on artificial intelligence, both internally to make our operations more effective and efficient and also externally, like our, for example, our multilingual customer services bot. Really, innovation all across the board is driving that growth. When you look, I think the best evidence probably to that value that we deliver to our merchants through innovation is the very fast growth in the number of merchants that are joining us along the way.
If you look at just the enterprise side of the house, we've tripled the number of merchants, of enterprise merchants that we had at the time of the IPO, but we've actually quadrupled the number of large merchants, those that generate more than $1 million of revenues on our platform. I think this is evidence to the growing value that we bring to our clients. We don't just add additional merchants to the platform. We also add services like Multi-Local, for example. Multi-Local was virtually nonexistent on our platform when we IPOed. It was just kind of initial attempts. Now, if we fast forward to 2025, we expect around 15% of our GMV to be generated through this innovative offering, which is mainly catering to our larger global mega brands. We're also entering new verticals as we go along.
Again, an example is consumer electronics, virtually nonexistent when we IPOed, now expecting to do more than a quarter billion dollars just in this vertical in 2025 alone. If you broaden the lens for a second and look at the TAM that we are going after, it is already massive. Even if we just look at global B2C cross-border trade, that's already more than a trillion-dollar market, and it's continuing to outpace in its growth the domestic e-commerce. Actually, with the new models in place, especially Multi-Local and others, we're actually expanding the TAM that we planned towards the broader global e-commerce opportunity and expect over the next few years to capture more and more out of that opportunity.
I think that rapid growth that we have already generated and expect to continue generating in both the levels of our activity, the visits to the sites, the interactions, and the number of merchants, that yields two things that go hand in hand. One is SCAYLE, of course, generating economies of SCAYLE, enabling us to operate on an ever more efficient model and giving us constant access to Tier 1 providers that complete our ecosystem.
At the same time, that data asset that I talked about and our ability to harness it generates what we call internally economies of SCAYLE, basically knowing more and more what these best practices are, what are those insights and things that only we can come up with because we are the only ones that have that combination of SCAYLE and know-how and broad view over the entire value chain that is required in order to sell effectively internationally. That combination of SCAYLE and skill is what's driving our very effective, competitive flywheel effect because the better our insights, the sharper our insights, the better performance we can generate, the better conversion uplift we can generate for our merchants. On average, we generate more than 40% conversion uplift, broadly speaking, to our merchants. It's a massive upgrade. It's not just a marginal improvement.
It's a complete change in how they do their business internationally. The more of that conversion uplift we generate, the more sales these merchants have. The more sales they have, the more merchants also join our platform because we have more case studies and more track record, the more data we gather, which enables us to even sharpen our insights even further and so on and so forth. That is a very, very powerful dynamic flywheel effect that is propelling our business forward. Now, if I pause for a second and take a look at the road ahead, we're very excited, as you probably noticed from what we've been able to achieve so far, but we're actually much more excited by what is in stock for us for the next near term and long term.
Because if we look at the road ahead of us, first of all, you saw the TAM that we're in. There's still a massive opportunity to grow both with our existing merchants, capturing more and more of their business and bettering our performance with them, and of course, also to add additional merchants in all the geographies that we already operate in. In addition to that, there is still a lot of room both for geographical expansion to support more outbound markets. We grew from supporting nine outbound markets at the time of our IPO just under four years ago to close to 40 different outbound markets that we support today, but there's still more room for growth, still additional lanes that we can support on the outbound and expansion to additional verticals. I mentioned consumer electronics.
We've also had, in the last years, a lot of success entering the sports teams vertical, and there are additional verticals that we think that over time we can expand into. Nir is going to go into a bit more depth into our go-to-market strategy later on, but I'll just mention for now that another thing that we are constantly transitioning over time is from doing mostly outbound sales, which is what we did, I would say, many years ago, to relying much more today on channel partnerships to be a force multiplier, if you want, on our ability to reach new merchants both in our existing geographies and new geographies.
Another thing we can do using our very long-standing and intimate relationships that we have with all of our merchants is also to go beyond the, I would say, baseline value that we bring to them, which is already very meaningful for them and very broad. We think that over time we can add more and more value-added services, I'm sorry, on top of that, driving more value to our merchants and increasing even further the stickiness of our services. Some of those we've already mentioned and we'll mention today, like Borderfree, for example, which is our demand generation service, like Global Duty Drawback, but there are many others that we believe we can develop over time in order to broaden even further the scope of our work with these merchants.
Now, if I look at the slightly longer horizon, Managed markets, which is our solution developed together with Shopify, aimed at the masses of relatively smaller merchants on the Shopify platform, that's showing very good signs of initial traction. We believe that over the next few years, with additional investments, with additional work hand in hand with our partners at Shopify, we can actually drive this line of business into a very big opportunity by itself. Lastly, if I look even further into the horizon, we operate today almost solely in the B2C market, but if you look at the B2B market, there's actually a massive opportunity there as well.
B2B is always slightly behind B2C in terms of adoption of new operating models, of new solutions, innovative solutions such as ours, but fundamentally, there is no reason why B2B brands will not be able in the future to cater to their business customers around the world directly in the same manner that the B2C brands that are working with us are doing. We believe that in the longer term, we can actually play in that arena as well and rely on the know-how and capabilities that we have already built, plus new capabilities that we know we need to add in order to lead that market as well. That is what I wanted to cover kind of to start the day off. If I summarize what I have talked about, first and foremost, I think it is very clear.
We are the clear market leader in the global e-commerce enablement field, and we operate in an already big and fast-growing market opportunity, which we are capturing more and more of. We drive revenue growth for our merchants, and therefore, for us, that's the fundamental 100% alignment between us and our merchants that is enabling us to propel the business forward. We do that on the back of continuously innovating, continuously adding additional services, additional capabilities, additional offerings to our platform. We do not just invest in capabilities. We invest in data as well and in harnessing the fast-growing data asset that we have, and that is powering very compelling competitive flywheel effects that are further increasing our quality and performance gap versus anybody else. We do all of that on the back of a very attractive, scalable, yet profitable growth model.
As we look into the future, we actually see many different avenues for additional growth over many years to come, both in the near term and the longer term. With that, I want to hand it over to Yehiam, our CTO, to lift the hood a bit on Global-e and give you a deeper glimpse into the tech that enables all of this. I'll let him take it from here.
Thank you very much, Amir.
Thank you.
Good morning, everyone. I'm Yehiam Shindler, Global-e CTO. In this session today, I would like to walk you through our product and technology story. It's a story of SCAYLE, innovation, and excellence that power global emergence. We are going to explore the way our technology is shaping the future of global e-commerce. First, let's start with our key performance metrics. In 2024, we delivered two billion site visits with over 120 billion API calls. In addition, at peak, we delivered 15,000 API calls per second. We managed to deliver this tremendous volume while achieving an uptime of 99.98%. We are 100% cloud native, and we are integrated with more than 300 third-party APIs via Open APIs framework, which allows us to connect to key e-commerce partners. With more than 50% of our workforce in R&D, we continuously innovate, and last year, we delivered 442 versions to production.
At Global-e, our commitment to R&D and continuous innovation is clear. We increased our R&D spend by three and a half times, crossing the $100 million mark. Our team also tripled over this year, and we also expanded our footprint into nine different R&D locations. This strategy allows us to tap into world's top talents, support our merchants within the region, and also accelerate innovation. Our success is built on four pillars. The first one is a robust and scalable architecture that delivers reliability at SCAYLE. The second is our continuous innovation of product and technology that drives new capabilities all the time. The third pillar is end-to-end security and trust, which keeps our merchants and shoppers safe. Lastly, it is the high-performing team that makes all of this happen. Let's take a closer look. Global e-commerce requires reliability at SCAYLE.
Our first pillar, a robust and scalable architecture, allows businesses to grow without limits. Over the past four years, we experienced significant growth in platform demand and usage. API calls have surged 8x, crossing the 120 billion calls per annum, reflecting a dramatic increase of platform volume. The total number of products managed by our system has grown by 5x, and most importantly, the number of orders has increased by 4.5x, demonstrating that our usage increase not only reflects high usage of the system, but also drives real growth for our merchants. This combination of rising API calls, product expansion, and order volume demonstrates that our architecture and scalable cloud-native platform can handle the growing demands. Our platform is built on a 100% multi-tenant cloud powered by AWS and Cloudflare CDN for content delivery.
We ensure high availability of the platform by building in significant redundancy and also deploying a fully functional disaster recovery setup in a separate AWS region. This allows us to ensure availability at all times of both the PCI and public environments. This architecture is highly scalable and capable of handling any volume and demand. We are committed to continuous investment in state-of-the-art technology and also keeping our infrastructure up to date and keep optimizing it more and more. Our continuous investment keeps our platform in the forefront of innovation and allows us to handle any demand. Our architecture is built in four different layers. The first layer is the infrastructure, which is powered by AWS and Cloudflare, and this actually allows us to operate our entire platform.
We have the core capabilities, which are the essential functions of our system, such as checkout, payments, fulfillment, communication, fraud prevention, data, and security. These core capabilities are then wrapped with another layer of APIs, which allow simplicity, extensibility, and also fast integrations. We have different APIs for order creation, returns, dispatch notification, gift cards, refunds, tracking events, and shipping documents. The last layer is the product features that actually represent the end-user functionalities, like localized checkout, different payment gateways and methods, carrier integrations, price calculation, duties, and taxes, to name only a few. This layered approach allows us to ensure that every component is optimized for SCAYLE. It also allows us to easily integrate with different partners across the ecosystem. Globally, a robust architecture powers more than 1,400 direct and thousands of indirect merchants. Now, let's explore the way our architecture seamlessly connects to the ecosystem.
Our platform sits at the center of a very connected ecosystem and connects to a wide range of partners in fulfillment and logistics solutions, payment providers, fraud management tools, and also various e-commerce platforms. Our Open API approach actually allows us rapid and flexible integration and integration with partners, merchants, and other parties in a fast manner. In essence, our platform acts as the central hub of the global e-commerce ecosystem, delivering a seamless experience for both our merchants and shoppers. Here, you can see two merchants, Logitech and Xerox, that testify about our capabilities to onboard very robust and complex projects in a fast time to market. Harrods managed to replatform the entire e-commerce system in under six months, and Logitech is described globally as one of the fastest and most versatile e-commerce projects they ever had.
This testimonial speaks directly about our robust architecture and agility that allows us to support high-SCAYLE merchants with very unique requirements and a fast onboarding time. Our second pillar is continuous innovation of technology and product. At Global-e, we believe that true innovation comes from collaborative inputs we get from different parties. On the left side, you can see the different sources for the inputs, like discussions with merchants, requirements from partners, internal ideas, and also advice from external experts. These inputs are then becoming requirements that are moving into a process of design, development, and QA. The output of this process is a swift innovation delivered across our platform and APIs. We also put in focus stability and security in every product release. By co-developing features in partnership with our ecosystem, we continuously refine our platform to meet our merchants' and partners' needs.
Earlier, Amir presented our broader product roadmap. Our rapid growth and evolvement of solutions allows us to innovate even faster, and I would like now to show you a few examples of that. AI is the core of everything we are doing in the company today. We have multiple use cases in play and others that are being deployed across our different platforms and services. The first example is our AI-powered chatbot for customer services. Returns can be a major pain for both customers and merchants, and these solutions streamline the entire process. By leveraging AI, we guide customers step by step throughout the return process, reduce the support overhead, and overall improve the post-purchase experience for the shopper. This video demonstrating our CS chatbot guiding a buyer through the return process.
As you can see, it takes the shopper step by step through the journey, starting from choosing the product he would like to return, selecting a return reason, and finally generating the return label. Pay attention to how intuitively it leads the shopper through the different phases of this process. Now, return is only one use case of the chatbot. Today, the CS chatbot is handling more than 50% of the total customer service tickets. It also improves significantly the shopper experience, allowing him to receive a return label about 10 times faster than it would take him if he would open a support ticket. The second example is related to extending our omnichannel capabilities. We developed a new feature called BOPIS, Buy Online, Pick Up In Store. It allows the shopper to choose one of the merchants' physical locations as the order pickup location.
It also presents multiple advantages both to the merchants and the shoppers, like leveraging the local store inventory, reducing shipping costs, allowing immediate replacements, and also increasing the footfall to our merchants' stores. This feature actually streamlines between the online and offline shopping experiences and also improves the shopper experience and provides our merchants tangible benefits. The next example is a key area that we are focusing on, which is developing more self-service capabilities for our merchants that will allow them to manage their e-commerce business independently and in a very intuitive way. One of the recent developments we did related to self-service analytics. Our merchants can access now a live view dashboard to track the daily sales performance in real time.
In addition, they have access to the sales and funnel performance dashboards, in which they can track their different location countries and geographies and also track top KPIs such as orders, returns, average order value, and conversion rate. By providing our merchants access to this data, we allow them to get into much faster data-driven decisions, improving their operations, increasing conversion rates, and ultimately driving additional growth. The third pillar is our security, which is a key in our platform in order to ensure the safety of our merchants and shoppers. We took a holistic approach from cloud infrastructure to secure software development process. We built security into every layer of our organization. On the cloud infrastructure level, we leverage Cloudflare for traffic protection and Netskope for secure access. This ensures that our perimeter is well defended.
On the local endpoints, we use different tools for protecting devices and user identities, reinforcing the zero trust model. We also adhere to leading security standards and testing protocols such as PCI, SOC 2, ISO, SOX, and GDPR, and we are doing continuous penetration testing to validate our defenses. On top of that, we have a secure software development process that is baked into our SDLC, in which we are doing automatic code scans and periodic security audits to ensure that our code is written in a very safe way. By integrating security across cloud endpoints, compliance, and secure coding, we ensure that every transaction and piece of data is secured and safe. Our last pillar is our high-performing team, a cornerstone of our success. Our R&D team is composed of over 600 engineers, which 200 out of them are software developers.
The team grew significantly over the last four years, and we also expanded our global footprint. We have strategically located the R&D centers in key markets, and this allows us to attract top talents and also support our merchants within the regions. To support our ambitious goals and fast growth, we are attracting top talents and continuously investing in their development. Let me highlight four aspects of our approach. First of all, we built a structured onboarding program which immerses new hires into our culture and technology fast. They handle real-life projects from day one, making sure they are productive and comfortable with their journey early. Our R&D team is built under a guild structure, which is composed of specialists from different domains like software development, QA, DevOps, and AI. These specialists collaborate on solutions and make sure we apply the same standards between different teams.
The guilds also take an active part in hiring and onboarding our new employees. Our shift-left approach in continuous integration and continuous delivery ensures that we test everything early in the process, ensuring that security standards are being met and that performance metrics are being followed. This allows us to catch things early in the process and, by that, deliver high-quality software in a faster manner. Finally, we empower our engineers with cutting-edge AI tools like Cursor, Copilot, and other LLM coding assistants. By doing that, we allow our engineers to foster also a learning culture that makes them keep finding new ways to optimize the way they develop software. By 2027, we aim that 50% of global code will be generated by AI. By that, we'll be able to accelerate innovation in an efficient way.
Altogether, these strategies provide an environment that allows our talent to develop and our innovation to accelerate. Let me summarize the five key takeaways of our discussion today. Our highly scalable platform was built by diverse, experienced, and agile teams, ensuring resilience, adaptability, and continuous innovation at SCAYLE. Our technology is seamlessly embedded into a wide ecosystem, enabling deep integration, frictionless connectivity, and enhanced capabilities for merchants and partners. AI is driving efficiency and smarter solutions and also allows us to provide much more personalized shopping experiences. We see AI as a key in everything we are doing these days and in the future. We adopt a robust approach for security that spans from different layers of our organization, and this approach ensures that both our merchants and customers can trust our platform to protect their most sensitive information. Lastly, we continuously innovate across technology and product.
We are driving smarter solutions. We provide our merchants' self-service capabilities, and overall, we deliver more and more features that support our merchant growth. In closing, I would say that Global-e is more than an e-commerce platform. It's the engine that powers global commerce and the platform that combines state-of-the-art technology, continuous innovation, and a world-class team that delivers unparalleled results. Thank you very much for your attention, and I look forward to discussing any questions you may have during the Q&A session.
Thank you. Thank you very much, Yehiam. Thank you very much, everyone, for joining us today. It's a pleasure to meet in person in the event four years after the IPO, nearly a month shy of four years almost. It is an exciting opportunity for us. Global-e has done a very strong performance over the last four years since IPO.
On average, we've grown four to five x versus the global e-commerce market in each and every one of the years since the IPO. We were able to do it by a combination of things: from growing our own clients faster than what the market is growing, winning more business from our existing clients, as well as winning more and more business out of the market itself. We did it on a multi-layer GTM strategy that is compiled at the bottom of it of the basis for all, which is winning more and more new business and scaling up our ability to win new business. We're doing it through a better and a more proficient direct sales approach, combined with the ability to do it in many more markets. Amir spoke about our market expansion.
We came out of around 10 markets at IPO to 39 markets that we will be able to transact with merchants out of within 2025. It is scaling the direct sales capabilities across those markets. On the top of it, the continuous widening of our channel partnerships. The second layer of our growth that is contributing a lot to our ability to continue and SCAYLE at a high pace is actually growing our own merchants. Both Amir and Yehiam spoke about it. We continue to invest heavily in our product development in order to give better capabilities to our merchants in order to change with their needs as they grow and SCAYLE, as well as giving them more data to transact better with the capabilities they get from us.
This extra growth creates confidence and relationships that actually drive the second layer of growing within our base, which is actually land and expand, where we get more markets from large enterprises that launch with us and continue to grow with us over time, giving us more share of their business. On top of it, we complete it with additional value-added services such as a Global Duty Drawback program, such as demand generation and other tools we provided our merchants over time. All of it comes and is wrapped with the ability of Global-e to actually branch out into additional business models around us that allow us to actually capture more TAM and more business outside the traditional cross-border business we came from.
Once we double-click into the first part of winning new business, I would say at the base of it is actually the fact that we expanded dramatically our approach into its more than 30. It's actually 37 markets that are already transactional, two markets that are going to be transactional within the next quarter, bringing us to a total of 39 markets around the world. A huge, I would say, a huge growth we were able to make in a very efficient manner, still maintaining our S&M under control and our operational expenses under control. This allows us, I would say, to continue and grow with our brands and also win new brands in territories we couldn't do before.
Going into those markets, what's driving our growth within them is actually that we have a very sophisticated approach into how we source leads of prospects into our system, how do we cultivate them. We use multiple technological tools in order to do it and data sources that we crunch automatically through our models into a place where we actually see a prospect and what this prospect is actually worth for Global-e, what platform he's coming for. We know what's the level of complexity we see in investing in him. If he has his own built-in home platform, however, he's very small, we know that it might not be a high priority. We look at what platform he's coming from, what's the % of international traffic he gets, what's the level of localization that he currently has, how good is his proposition in each and every market.
All of this is being done automatically through the tools and actually being uploaded into a CRM system that actually allows us to see per market all our relevant prospects. On the back of it, we can look at and continue to enrich that data. We add into how do they do on international demand generation? Do they spend money? Do we see them? Do we see any signals? Did they go into a funding round? Did they change management? Did they hire a new VP for international? A lot of signals that we had, and on the back of it, we decide how to make the approach to them.
A combination of the size, the complexities, the opportunity would actually decide whether to go from an automatic sequence down to a junior employee or to a very senior member of our staff that would actually reach out. All that, when we go into the larger ones, we map it through our growing channel partners. We might decide that it is even not a direct approach. Despite the fact that we found, we understood that there is an opportunity now, we will direct it to a channel partner that we know is very much connected to that client in order to get a better response from the client and actually expedite our ability to onboard this client. This is, of course, coupled with our growing ecosystem. We do have a lot of clients that are being onboarded all the time.
Yehiam spoke about it from the technical side that we grew from around 90 external APIs to around 300. Those 300 are actually providers that work with us. They make money when we make money. They grow their business when we grow their business. They have an inherent incentive to work with us, channel clients towards us because they see the growth of those clients and they continue to enjoy it. That is what led into what you see here that we got in 2024 to a point that more than 60% of our business, of our booked GMV in 2024, actually came through channel partners. Some of them, our channel partners that two years ago were not part of our network. If we just, Amir mentioned that too. He spoke about SCAYLE.
SCAYLE came in, and on the back of SCAYLE, joining us, saying, "We want a partnership with you." Within a year's time, we got Harrods into the roster and Manchester United into the roster, two of our largest brands that just launched in 2024. Within those channel partners, we have two that are more strategic. They have been with us for a long period of time. On the one hand, we have Shopify. We are already five years into the partnership with Shopify. The initial term was three years, and we continue and extend our partnership every year. Within it, we also expanded Zip partnership. When we launched the partnership with Shopify, it was just for the 3P solution, which is our enterprise platform. I think a bit shy of a year later, we expanded this partnership to also power Shopify managed markets.
We extended and widened the partnership, and now we continue and extend this partnership going forward. The same goes with DHL that has been with us for 10 years. It is a very long-lasting partnership. We believe in it. It is doing great for us. It is doing great for DHL. It allows us not only to enjoy MFN or preferable rates, it allows us to provide our merchants with those partners a better service level. We have access to the relevant team. We get better service. Our merchants enjoy better service through our relationship with these partners. The last thing that we do when we look at how we go to market to win new business is actually taking advantage and acting proactive on changes that are happening in the market. I am not sure you all heard of it, but there are some recent issues around tariffs around the world.
It's recently in the news. Maybe some of you follow it. On the back of it, on the one hand, it creates pressure. Look at yourself. Everybody here around the room is aware of it from the left that I hear. It means that our merchants for sure are aware of it. And other merchants that are not our merchants are aware of it, and consumers are aware of it. On the one hand, short term, yes, it creates pressure. It creates pressure on consumer sentiment because you start to hear a lot of discussion about it. It will make pricing higher. It will cause inflations. People are likely to cut down on their spending. That might be a reasonable outcome for the short, midterm when you look at the consumer side. However, when you look at the broader picture, it makes life more complex.
This is where Global-e thrives. Complexity and making complexity simpler is where Global-e makes its money. We know how to tackle things that are very complex and make them simple. Just think about the duty changes now for a European merchant that is selling on average 50% of his products at our country of origin, China. Now the 10% that were levied and then the extra 10% that were levied on China, what he needs to do in order to work with that is not just saying, "Okay, I'll bump my prices 20% up to the U.S." No. Because of the extra 10% that are actually suspending the $800 de minimis, now he needs to be able to make sure that he has a carrier that can actually deliver duty-guaranteed products into the U.S. Because maybe he was selling a $200, $150, $100 average order basket.
He could use whoever he wanted. It was never stopped in customs. Now it's all going to be stopped in customs. If you don't have the right carrier, you just can't get goods into the country. You need to switch a carrier. You need to make changes to pricing to a specific country. You need to make sure that if you have a duty tariff set and you show guaranteed landed cost, you need to adjust that duty calculation. All of that is for a single market that might be, if you're European, on average 15%-20% of your business. The complexity it's creating for you is huge. This is where Global-e gives you simplicity. We tell you what to do. We tell you what we expect the effect on your business would be.
We can calculate it for you because we run it for our existing brands. We run it through our systems. We know how much of the product sold to the U.S. were country of origin, China. We know what would be the effect. We tell you how much you should uplift your prices in order not to hurt too much your conversion rates. We will transfer seamlessly your orders into relevant carriers that can actually get it into the country. If we do more than that, we can even connect it into a plan that can assist you with duty reclaim for the 10% or 15% returns that you have out of the back from the U.S., saving you another 1% or 2% of your total cost of trading into the U.S. This is only one market. Now look about it when it evolves.
Canada is implementing 25% or implemented 25% on the U.S. for certain HS code. You need to be a PhD to understand how does it apply to me. Do I sell this HS code? Is this 5%, 7%? You don't need to do it with Global-e. This is our business. We'll tell you what's the effect on you, and we'll tell you what to do with it. That's why we love it. That's why on the back of such events, Global-e is reaching out and explaining to merchants the value we can bring. Over time, we believe, as we've seen it happening in actual in Brexit, over time, it will bring more business to Global-e. All in all, the combination of those channel partners, direct sales, more markets, being proactive is what's driving this exceptional growth in our ability to win new business out of the market.
In the last four years, Global-e has quadrupled the new bookings of GMV into our platform. Just to give some perspective, in 2020, our entire platform GMV for the year, as Amir showed it, was $770 million. We signed 50% more of it new business only in 2024. That is how we do better on executing on our go-to-market strategy, winning new business. These are some of the names. Each one of them is amazing by itself, but these are some of the names that just joined us in 2024. Victoria's Secret, amazing brand. It was the second largest client of one of our competitors that decided to switch to Global-e. Harrods jumped straight into the top five clients of Global-e. Harrods came out of the debacle of Farfetch. We win business. Some of it is out of the market that did not have any solution.
Some of it, as you've seen in this example, is actually coming out of being able to demonstrate what we built over the years, the strengths of it versus competition and bring more business to us. Third example is the same, Manchester United. Together, we SCAYLEd in partnership. We actually replaced Fanatics and went into Manchester United. We have a lot of nice names. We do a lot in growing the business. This is just one year. Think about all the changes, new verticals, sports goods. Just below it, look at Logitech. Amazing brand. It's our first really nice brand that is actually the bread and butter of consumer electronics. When you win such a brand, you get a certificate of excellence within the vertical. This will allow us to propel our and double up on our penetration efforts into bringing much more consumer electronics.
Supreme, amazing, direct-to-consumer, super amazing brand. We go with them. We open market by market in new territories, and it's just spiraling up like crazy. Quite a lot that you see all around new businesses that we're able to acquire. These businesses are from different verticals. The largest vertical for us would be apparel and accessories. That would be the largest. This is what people like to buy on the consumer side the most. You would have the likes of consumer electronics and a lot of beauty and cosmetics. Sport and fitness is actually growing for us. It is still small, but it is growing very rapidly for us. Most of our business is done with the brands. In the past, if you look at Global-e, five to 10 years ago, we have a much larger share of retailers.
Over time, you see the brands are moving forward, wanting to transact globally directly with our own consumers. You see the growth in share of our trading in 2024, reaching 70% that is actually brands that are actually selling directly around the globe. That takes us to the second layer that finalized our win new business layer. Now we are going into how we grow our business with existing, which is, I would say, a multiplier of growth. This also is comprised out of three components that we spoke about. Now let's dive into how we grow our own clients. We have a team of CSMs, almost, I would say, 100 of them, together with data analysts that support them. They are based in each and every geography we operate merchants from. The CSM is the focal point for our merchant.
Anything they need, they are their ambassador within Global-e. They need to bring the knowledge of Global-e to the brand of their onboarding. This is before the merchant even launched on Global-e. The moment a merchant is signing in parallel to the tech track of getting them live, a CSM is sitting with them and rebuilding their global proposition in order to make sure that out of the gate, the clients feel the difference or consumer feels the difference of trading with them. This leads to what Amir mentioned earlier. Out of the gate, once you're going live with Global-e, on average, our merchants see typically 40% growth in sales conversion. This is huge because the most expensive thing for a merchant is actually sales and marketing traffic generation in online. The cost of it is spiraling up. It's killing the brands.
If you can get 40% more of existing traffic that is already coming to your site and you already paid for it, this is a tremendous out-of-the-gate result that we can bring from the combination of our capabilities, our know-how, and the dedicated support they get from our team. Over time, the CSM is the one that should bring the Global-e knowledge into the merchant because what we guided you when you onboarded is not the same on what I can tell you a year later. I know your data. I know how your consumers reacted to what Global-e has done with you, to the new capabilities. You did not transact in a local currency. You did not have duties embedded into the price. You did not have iDEAL or you did not have Klarna embedded.
Now we learn a lot, and we continue to optimize because we get you into a peer group. We look at how you trade versus your peer group in each and every market. We do it on a relative conversion rate so we can actually take everyone into the same language. This allows us to tell you you're doing not as good as x, which is not the merchant, but your peer group. We know why. We can tell you why. Because your return offering is not in par. You offer a return in Germany for EUR 15. He offers it for EUR 5. This by itself caters for around 15% conversion. You offer outbound shipping for EUR 10. They offer it on average for EUR 5. The best practices, if you match that and you just think your prices, your AOV, you increase it 2%, you will get another 7% uplift.
We have this data. We know how to embed it for you. Over time, this is what our CSM are bringing to the fingertips of our merchants in order to grow them faster. This is combined with the ongoing product innovation that Yehiam spoke about. Our approach to the product innovation is merchant-based. Yes, we do look ourselves. We do understand changes in the market. We do things that are internally driven, but a lot of it is from listening to clients. Clients are more sophisticated. We have a diverse ecosystem of clients. We have those that are just direct-to-consumer, all of our business is online. We have those that are traditional. We hear them all. We listen to them all.
Once a year, we take all of our top 100 merchants into three events around the globe, sitting with them, listening, sharing what we think is a roadmap, getting their feedback, and aligning in order to make sure that we develop what they need in order to do better going online, but making it simple for them to trade better. The result of that effort is actually translated into numbers because it's not only that we get a push once we onboard them into the Global-e platform, but over time, when you look at our different cohorts since inception, actually, we're at a 4x on average cohort growth. We don't only onboard them. We continue to grow them over time. We grow our clients. You see it in our NDRs that are tracking over the 120%. You see it in the first typical onboarding that gives them a 40%.
All of it over time translates into a huge tool of growth coming out of our existing clients. When you grow your clients and you have a track record, you make your merchants your own brand ambassadors. I did not double-click on it, but when you looked at where we get our business from, 62% was channel partners. We spoke about the 29% that was direct. 9% is coming out of ambassadors that are our clients. They are actually bringing clients to us. Those inbounds, a lot of them, are our merchants bringing other merchants to us or people that are actually moving from one place of employment to others. We have ecom director for the fourth time working with Global-e. They switched four positions. Four positions.
What they thought was a successful decision or a good decision to bring to their new job was actually coming and bringing Global-e in, which we highly regard as a testimonial of success. When your brands are happy with you, it gives you two levers of growth. One, you grow with your own brand. Especially when you go to the larger brands, Disney of the world, the Adidas of the world, you do not get everything. They do not just say, "Oh, take my e-commerce." Over time, if they trust you and you do good work for them, you actually win more and more business. You can see the Adidas example here. Some of it was planned between 2021 and 2022. Other is actually continuing to expand it. When you see the numbers of markets, it is not just a number by itself.
It's a much bigger market over time. Usually, you start with the smaller markets, and if they gain confidence, more and more larger markets are being moved to Global-e. The same goes into brand groups. You can see that we have a continuous growth over the last six, seven years with the LVMH group. I think that today we have over 30 Maisons out of LVMH with us, and it continues to track year after year. We have it since 2018 with Pink and Marc Jacobs, but it's now six, seven years that we're on the road, and we continue to onboard more and more Maison out of LVMH. This trust goes back to the flywheel effect that Amir spoke about. I'm not going to bore you.
Again, with a robust explanation about it, more data, more merchant, more trading brings us more merchant, gives us better advice, and actually, that's driving our competitive moat. The competitive moat, Global-e is by far the market leader in global e-commerce enablement. However, we do have competition. We have competition that is an outlet through a branded marketplace. In the past, we used to see it more. We spoke about Farfetch with Harrods. We spoke about the world solutions for luxury, especially like Matches Fashion, like Net-a-Porter. A lot of them are either not with us anymore or are not doing well. This is not doing great as brands continue towards direct-to-consumer, and we enjoy that trend. We do see some point solutions in the cross-. We do see some point solution in the cross-border arena itself. None of them was able to SCAYLE as Global-e SCAYLEd.
If I would look at my competitive landscape five years ago, it was a much stronger player versus Global-e, not to speak about 10 years or more than that when we just started. There were different competitors, much stronger than us. We managed to execute better. We managed to generate, I would say, that flywheel of data and capabilities and SCAYLE. It is a game of SCAYLE in Global-e commerce that makes it very hard to compete with. That goes into our main challenge. It used to be, and it still is, the vast majority of time is within in-house. This is where we need to continue and educate merchants. That goes back into my approach on the opportunistic changes. When it becomes more complex, we need to educate merchants that it is better to do it with a trusted partner, that this is day-to-day.
He knows how to take those complexities out of your life. You don't need to all the time employ your team in doing things that are not the core business of what you know to do as a brand. This places us in a very good competitive place. The last bit that is actually driving Global-e growth is our ability to move into adjacent businesses, leveraging what we built in Global-e, leveraging our capabilities and know-how, and trying to push it into additional TAM that we see applicable. We just recently launched Borderfree.com. That was, I would say, one of the key pillars why we decided to buy Borderfree a couple of years ago. We wanted to give a tool because of the growing cost of demand generation, and we're seeing our merchants struggling to invest in growing their global presence.
If they need to cut down, as everybody now is against stress, the first thing that is being cut down is international markets because they have own bias. Here is where Global-e can play a big part, giving them access to demand generation at SCAYLE at a guaranteed ROI of 10%, which is amazing for virtually any brand. We have a base of more than two million registered users on it. I think we can play the video now, and on the back of it, I'll speak about initial numbers since we launched it.
Attention, passagers. La prochaine station, Paris.
Y ou can have whatever you like. When the beat goes off, we bang to the.
Next station, Oxford Street. Please mind the gap.
You can have whatever you like.
You can have whatever you like. Whatever you like. Whatever you like.
You can have whatever you like. Borderfree. Where in the world?
Whatever you like. Whatever you like.
Thanks. Basically, we launched it in November, just three months ago. We are still in the early days. We still learn a lot, but I can tell you we're quite happy with how we see it forming up. We had, in the last three and a half months, 2.5 million visits to Borderfree.com. 500,000 of them were actually redirected from within Borderfree.com to our clients. On average, for the more than 200 merchants that already participate in the Borderfree program, more than 2.5% of the revenue on Global-e came out of Borderfree.com and its marketing activities.
For the top performer within them, we crossed 10% of the global sales that are actually coming from the affiliate of Borderfree.com, where we drive the traffic to them through our marketing activities. We have more than 170,000 subscriptions of new members within that period into the Borderfree.com program. We got world exposure with, I would say, basically transacting in more than 100 markets. We just recently got our first two success studies out of it. Really nice brands. Many of you, I'm sure, know both Frank & Eileen and APL. Frank & Eileen, 14% of their sales, GMV in the period, came out of Borderfree.com marketing activities. It's huge. It's a huge proportion that we managed to do for them. Over time, we aspire with the changes and adjustments we are now doing to Borderfree.com that many others would follow towards the 10% mark.
It's not only that it's great for that brand. It will enable us to sell it much more when we go into the second phase of rolling it out to more merchants within the global arena. Much more than that, it creates another competitive barrier. Think about the merchants that Global-e is creating: 5%, 10%, 15% of his business. If someone now comes and wants to sell an alternative cross-border solution or a global e-commerce solution, even if he's offering it half a percent cheaper, no one wants to lose a tool that is actually driving 10% of his growth. Acquiring new merchants, new consumers today is super expensive. It is another layer of stickiness and another layer in growing our clients' businesses into the future. Same goes for APL: 6.7% of their GMV is Global-e.
30% higher AOV with shoppers that were introduced to the brand through Global-e, actually transacting or sold already in 21 markets. The next initiative that we launched a couple of years ago is Shopify managed markets. We did it on the back of extending our partnership that I spoke about with Shopify from only the 3P solution, which is our enterprise platform, into what we call 1P, which is Global-e behind the scenes powering Shopify managed markets, unlocking a vast TAM opportunity. A lot of it are smaller merchants than what we can handle or we would take on the enterprise platform. In the last 18 months, since we actually went into GA and launched the product, we were able to get it as simple as less than a one-day onboarding time. On average, to onboard and transact with Global-e is six weeks to 12 weeks.
Here you see less than a one-day. Some of them are going live within two hours. They are able to transact by pressing a button. Two hours later, they are actually transactional on managed markets. That allows us this crazy amount of brands that already transacted on managed markets, which is more than 10,000 merchants that actually utilized the solution, selling to more than 170 markets worldwide. We are working closely with Shopify in order to see how do we increase the adoption. How do we make it, I would say, x time bigger than what it is now as part of it? We are investing heavily now in changing elements of how we built it, not on the consumer side. Consumer would not see major differences, but much more of the backend side, making it super seamless to adopt to the merchant, not only to onboard.
Onboard is already, as you see, quite sophisticated, but actually as simple as trading domestically with Shopify today. We want to make it seamless for them within the same dashboards, within the same processes, within the same payouts system, and the same payout calendar. A lot of it is being done behind the scene, and we hope to deploy it within the coming two quarters. Also, Amir mentioned it. We expanded our business model into global e-commerce. We used to be cross-border e-commerce. That was our main focus. Today, we have 15% of our business, which is Global-e commerce. In order to get on a high-growth platform over time from zero in 2020 to 15% that it's expected to be in 2025, you understand that the growth of Multi-Local for us is much more than the 15% that is reflected on the overall.
It's growing tremendously for us, allowing us to access terms that we couldn't access before, allowing us to bring clients from verticals we couldn't access before because they don't do cross-border because of registration, licenses, etc., which is, I would say, a great business that we believe would continue to fuel our growth into the future. The last bit, when we speak about new time and opportunity, is actually B2B or global business-to-business e-commerce. The potential for it is immense. The contribution today for us is very low. However, the value itself is tremendous. It's a $20 trillion market that is currently trading B2B e-comm, but most of it, by far, is centralized in domestic e-commerce because the cross-border e-commerce for them has the same difficulties that Amir presented that are facing also B2C merchants.
However, if we are able to build over time solutions for them, utilizing our core competencies, we have core competencies about transacting in multiple countries. However, they require some variation of it. In order to remove the specific barrier for B2B, it requires some variation because they do not use B2C carriers. It is not just putting a two-kilo parcel and sending it over. It can be something that needs a freight forward. It can go maybe freight by air, but most likely it will need freight by sea. It might be that it does not require a full container, but it just needs to have a pallet on a container. You need to have a solution that allows it seamlessly for them to be able to do it for you to that lane.
It goes into having an IOR because if you want to give a guaranteed landing cost to someone that is buying a $50,000 machine from you and you're not a tech expert on how is it to import into Switzerland, you need someone that can actually be the clearance on the other side where Global-e can actually leverage our capabilities, not our current capabilities, by the way. Today, our business is based on a personal import of the consumer, but actually Global-e building and accelerating our model of being an IOR for such clients in order to give a guaranteed landing cost also to a B2B, down into the formal clearance on whatever required as formal clearance. There is huge opportunity.
I believe that the next wave of growth would be from those clients targeting Global-e commerce because the rationale to cut out the middleman that was in the past in B2C, because if you spoke 10 years ago with five years ago with Versace, with Adidas, and told them about Global-e commerce, they would tell you, "No, we have a distributor in country A. We have a distributor in country B. We don't want to interfere with our business." You have seen it changing over time, accelerated in COVID, but changing over time where they actually take the ownership of the e-commerce to become global because they want to own the client relationship. The same logic applies here.
Over time, we believe that if we build the right solution and we see the e-commerce platforms are moving in that direction, Salesforce, Shopify, others, we believe that if we take part of that, it will create a next wave of growth into the longer term for Global-e. Just to summarize what we spoke about, we have a highly efficient S&M model and approach allowing us to enjoy less than nine months payback period despite the fact that we are growing dramatically on new bookings year- by- year. Our channel partnerships are evolving and growing, actually hitting a record of more than 60% of our business coming out of channel partners, and we expect that to continue going forward. It allows us also to go up SCAYLE because the larger brands, the super large brands, work with consultants and agencies, etc.
In order to get to them, you need to have channel partners that believe in you. We have multiple levers for growth, not only from winning business in the market, but from growing our current business and continue to execute well on getting our clients to grow. We have a data-driven consulting approach that is getting us very close to the client, making the relationship tight as a partnership creates much lower attrition rate out of our platform. We have a lot of new horizons we spoke about to support growth in the longer term. Engines like demand generation, like managed markets, like B2B. Quite a lot of things for us to do. Thank you very much.
Excuse me. We're going to take a 15-minute break. There is coffee and snacks in the same room where you had the breakfast and the restrooms past the elevator. We will come back here at 11:25.
Thank you.
Oh, you could have asked me for a photo from a few years ago.
That's accurate. That's a good one.
This is it. You should have seen that first. I had, like, that multi-chair.
All right, all right. Just wanted to get the session kicked off here. First and foremost, I want to thank two of our most, let's just say, exciting brands for joining us today. Never an easy one to step away from the day-to-day, so honestly, you know, thank you. More importantly, excited to hear the story. I think there's a few things that obviously we'd love to walk the forum through here today. First off, introductions. Why don't we start with Michelle? Maybe you can give a quick introduction on yourself and then the brand as well.
Sure. Hi, everyone. Thanks for having me.
My name is Michelle Wasserman, and I have a background in scaling retail businesses for nearly 20 years. I am currently the GM at FIGS of the international business. FIGS is a medical apparel and lifestyle brand with a mission to serve those who serve others. It's been a really incredible journey at FIGS and partnering with Global-e.
Love it. All right. Thank you. Dan.
I'm Dan Elmoznino . Good to meet everybody, and thank you for having me as well. Similarly, I have a long background within the e-com space. I work with Kith about eight years full-time. It's been an exciting journey. For everybody who doesn't know what Kith is, we're a lifestyle brand as well in a very different way. We're a retailer. You know, foundationally, we were founded as a footwear retailer, and we've converted into the fashion space.
We do multi-season product, a lot of collaborative release product. Definitely an exciting space. As many growing, fast-growing businesses, you wear multiple hats. Like as a title, I wear Chief Brand Development, Chief Web, whatever, Chief Expansion, whatever the growth requirement has been over the course of the years. We are in a very, very good hyper-growth state. Globalizing is a very big piece of that, and happy to be a partner.
Love it. Chief Travel, Chief Store, Chief. Yeah. Lots of chiefs. I think it is exciting because I know we have heard throughout the discussion this morning a lot about enablement, right? Global enablement, why typically brands would partner, whether they do it in-house, whether they have a current setup establishment today. More importantly, why did you decide to go with an e-commerce enabler, right?
I want to start that question, maybe Michelle, with FIGS and tell us your story, tell us your journey. I know we've been partnered for many, many years, but curious on what that initial excitement really took place.
FIGS expanded internationally into three markets in 2020. At first, we did it all in-house. The demand was good. The customer experience was very poor, and it was very operationally complex. We decided to partner with Global-e for four reasons. The first is we always put the customer first. Customer experience is obviously very important, and the ability to localize is and mirror customer expectations around payment setup, obviously currency, payment options, messaging, and even language. Customer experience is first. Second is I always like to think of our team.
Having that support around global compliance management and tax payments, as well as other operational complexities. As a P&L owner, profitability. I know we partner a lot on profitability.
We do not negotiate at all.
It is a big benefit to partner with Global-e because we have shared SCAYLE, and much better parcel rates than we would achieve on our own, especially to some of our emerging markets, as well as duty and tax drawback for returned items. There are so many components to selling globally, and we have a lot of support on everything that might make it complex and really cumbersome. The fourth is it is very easy to continue to expand globally. I will call Matt, and we will open a new market in a couple of days.
I do not usually turn them on.
Our team, you know, but we'll talk about it. There is very little dev work needed to expand globally. It just really supports our strategy in terms of reinforcing the customer and then managing the business successfully.
I'm going to, I mean, same question, but digging a bit deeper on some of your, because I know we've been working together since 2019. We have been together for a while. I know your challenges differ than the average retailer, right? Tell us your story, tell us some of the challenges, tell us some of the barriers you faced at Kith.
First of all, I want to keep going after Michelle because it just covers most of my answers regardless.
I would say that further to the specific nature of what Kith was dealing with at the time, our e-com scaling and globalization goals in 2018 were similar in the sense that we were doing it in a very painful way. At the time, e-com used Pitney Bowes or whatever the service was, and you printed a label, and you attempted to do this DDP process, DDU process, rather. You'd have a consumer who would just reject the package saying, "I didn't know whatever the price was." Looking back on it, I remember the process, reviewing it, speaking with Matt, speaking with the team, speaking with other people in the landscape. I think that to answer the question more specifically that you asked, the challenge that we faced is we are a high-volume merchant in the sense of we get throttled, we get botted.
We were dealing with a lot of flash-selling issues, significant flash-selling issues. When I thought of what was the key for the partnership, it was not necessarily just the idea of selling international. There are multiple solutions. When we were reviewing the solutions, what we found with Global-e and specifically with Matt was the direct interest to partner with developers. I think that our integration was one that was so unique and such a spinoff within the Global-e landscape because we literally built our own SCAYLEd version of how do we mitigate flash-selling. We would actually take sales. We built a program that was unique within Global-e.
I think that knowing that I had a partner that was able to SCAYLE with me in response to the market and in response to the consumer behavior and trying to get very desired product created a massive difference to the landscape that was just offering international shipping service partnerships.
When we were able to see a partner that had a development team that can dedicate hours and resources independently to our needs and then work with logistics partners that we were working with at the time to personalize that experience as well, and we can have a lot of control over a very limited amount of product versus a very high amount of demand, and we were able to take massive entries, look at fraud patterns, and work with a cart partner who was able to really specify that to us was extremely the differentiating factor and to this day has been the most meaningful part of the partnership. I have a specified, tailored need to our business where in a market, most people want to cover 80% and not really focus on the rest.
It was.
I think the first day we met, you told me, "If you're going to want to partner with Kith, I've had a sale that will literally shut down the platform that serves me today." Global-e needed to be ready. You're right. I think it's one of those where having that investment, having the team relationship, and being able to build together, you also helped us build those capabilities, which obviously has been long-standing and helped us evolve our offering as well in the market. Thank you for that. Now I'm going to shift into the Multi-Local strategy, which has been a big topic for today around brands that are starting to really accelerate. I think through your journeys, although it started out as breaking down some of those very, we think of them as basic barriers, which is not basic to many.
We started to see inventory positions and entering different markets as a strategy to expand globally in a more economical, efficient way, whether it be for brand focus, whether it be for logistics, what have you. I am going to start with Kith on this one because I think your journey started when Brexit hit.
Correct. Tell me the entry into Europe, the strategy on how barriers you faced and the journey there.
Same kind of theme. We really worked together very closely, actually, on a very personalized approach. We took a very fast-growing flash site within kith.com. At the same time, we expanded our physical footprint, our retail footprint. We have close to 15 global doors, continuing to grow, adding more annually. Our main goal at that point was to partner our expansion physically in Europe with a European entity website.
I would have product that was already grounded for my retail, and I would open a third-party 3PL in that location, and then I would have a digital experience. Working with Global-e directly as a Shopify e-com store, we really recognized, after looking at the hurdles and specifically around this flash-selling issue that was happening at the time, that we would actually entertain and work on a solely based Global-e shopping cart. I have no native shopping cart even to this day on my EU website. So eu.kith.com operates independently of kith.com. Within that integration, we built an exclusive cart experience. With that, at the exact same time of building it, Brexit gets finalized, and it really changed a lot of what the intent there was.
Again, working with Global-e, understanding what was going to happen once product was grounded within the EU, how we would serve those customers differently, and what that user experience was going to be, still feeling localized within both of those markets, we've been able to sustain and have a very, very healthy business where the U.K. actually is the largest ship-to country within our EU portfolio.
On the FIGS front, tell us, right? I know the journey started single DC and single approach.
Yeah. For localization, it's really important for the customer experience to mirror your positioning as a brand. There are some brands where there's a lot of pull, and you just need to enable it, and the traffic comes. FIGS is a little bit earlier on our international journey where we're still building our relationships.
That premium experience and matching customer expectation is so important. We localize the site to varying degrees depending on the market and its needs, site assets and merchandising, and then obviously the currency and payment options. As we look to support our international customers more, those who follow FIGS may know that we're exploring additional international DCs, and we're really excited to bring the product closer to the customer. Even when we do so, we will continue to partner with Global-e because we are able to take advantage of continued parcel rate efficiency, the local currency, and payment options, which again, we would not necessarily partner with some obscure payment providers in Finland. Those are really important to the customer. We will continue cross-border transactions because it'll help us with our inventory management and reduce that complexity.
We're excited. We're still earlier on our journey, but we're excited in the next couple of years to take those steps.
We're excited to be there with you. I think it's one that, and I quote you on this one, to have a single site and serve positioned inventory around the world is the dream. To be able to have local inventory and not have to build up that tech debt is something that, and I see that's where it's heading. I really do. I know that there's a lot of complexities to make that happen and to enable it, obviously further on in the journey, but not far behind in the journey. It's exciting for us to see and be part of that together. I know the team had mentioned earlier tariffs.
I think this is going to be a new theme that we have to talk about in every meeting that we're in. We are making sure that we keep your emails full with what's happening. Curious on the overall tariff situation, the trade war, how is it impacting your business, and how do you foresee this really impacting the strategy and FIGS?
Fortunately, FIGS does not have a lot of exposure to China and is not produced domestically. We aren't that impacted today. Outside of the dynamic environment that we are experiencing today, there's a lot of change globally. The other day, I received an email from Global-e saying, "In the Middle East, HS codes are now 12 digits instead of eight digits. Japan now requires payment authorization to a second degree. HS codes for certain categories in Canada now have a different duty rate.
Increased tariffs in Finland and Israel. And then it says, so I'm like, "Wow." But then it says, "As with all duty and tax regulations, Global-e has automatically implemented these changes. No action is needed on your end." I'm like, "As an operator, those are the words you want to hear. You want to be up to date with the information, but not necessarily spending your time focusing on the dev work that is required to support those changes." Thank you.
You're welcome. I didn't write that email, but it sounds like—
N obody wrote that email.
Y eah, exactly. Exactly. On the Kith side, right? It started in Brexit, then evolved to where we're at now. I'm curious on how you see the tariff situation. Similar question, right? Impacting your business and things you're doing to stay ahead.
It impacts the business.
I think the one thing it's shown us was on the last administration change we had, there was the original tariffs within China. At the time, we were sourcing product from there. I think that was the awakening of you have to stay as a brand as ready as possible. You want to have diversity within production. You want to have options and understand what is going to help you maintain margin. Ultimately, these are margin hits, and you're going to absorb them on the business side, and you're going to try to find a way to manage production and source products in more efficient ways as much as possible. To me, the awakening came years ago, the first round. It's shown us that you have to stay as ready as possible to just be agile to respond to the market.
I'm in a fortunate position, as I say a lot of that stuff. I have a product that's within consumer demand. I create demand within our own brand storytelling. Ultimately, it's not like I can just pass any of this stuff down the line. We're conscious of pricing. We've really tried to maintain a zero price raise as much as possible. Internally, it means that somebody's got to eat it, or you've got to be better on how you get product. The consumer reaction, fortunately, has not been as painful. Having product that's limited in nature and staying very engaged with the consumer and maintaining demand is, for us, the biggest focus. As long as people are still buying, we'll have to increase our volumes, but we can sustain.
Protect against the bots. Yeah, no.
I think it's one, and I know it's been mentioned also, but these tariff changes, yes, although heightened now, have really been around for quite some time, right? Whether it be Australia implementing GST, whether it be Norway, whether it be Switzerland, whether it be the Eurozone, whether it be the U.K. and Brexit, what we saw, right? I think, yes, it's very highlighted now, and there's a lot of agility that's needing to take place right now behind the scenes to make sure that profitability stays key for what the brands are doing. It's one of the most important things. Keeping a brand profitable and growing in a market that's ever so changing, it needs to happen. I've got two closing reflections, which I want to dig in on a bit. Number one, right?
What is one key piece of advice that you would give for anyone entering their international journey in a similar spot to where you may have started yours? Please.
This one I'm going to tee up and let anybody take it.
Yeah, I was going to share. At FIGS, we like to really think about what is our value proposition as a brand where we have the greatest expertise, and we focus those resources in-house. We partner with best-in-class companies to support and leverage their expertise in areas that are less key to us as a brand, but very important to us as a business. That is where finding the best partners and being aligned in how we serve our customer is so important.
You know I'm going to put you on the spot, right? Because we do have data-driven insights.
You've heard Amir, you've heard Nir. I think everybody has mentioned the insights that we drive. I want to talk about this one journey that you took into Canada where you challenged the data insights.
It's not a journey. It was a bet.
I'm curious. I'm curious about that overall friendly wager and what was the outcome?
Just to bring everyone along on this journey, we talked a lot about customers' expectation around pricing structure. In Europe, duties and taxes are included in all of the pricing. In the Philippines, it's added at checkout. In Canada, duties are included in the base price. Taxes are added at checkout. Every country has a different version based on their customer's expectations. Early on in my journey with FIGS and Global-e, I really wanted to keep prices as low as possible for our Canadian customers.
I said, "Matt, let's add duties at checkout. It's fine. It'll keep the prices low. No problem." He's like, "I don't think so. I don't think so. We have data-driven insights that tell us not to do this." It was just a couple-week test. Needless to say, I lost the bet.
You owe me dinner.
I still owe you dinner. I know. Here I am.
It was, and it was a fun one. I think as you see it, it's just always we have a good laugh about it. I'm not getting into it with you because the first time I met Dan, massaging my shoulders, saying, "There will be a moment where I offer free shipping, Matt." Today is not that day.
Correct.
Just make sure my clients can buy seamlessly. Advice to the room, tell us.
We have a really strong philosophy during what we call hypergrowth for us. It's to be great at what you're great at. I'm great at storytelling, creating product, and focusing on this transitional period of retail experience. If retail experience, experiential activations, pop-ups, product, again, storytelling, partnerships, and evolving product is really our core function, I don't really want to get into the business of figuring out how to land VAT reconciliation in Belgium. It's not my core strength, and it's not something that I'd want to take and tackle. Now do that for 29 countries within one region and then figure out what are my most popular countries to have to continue to reconcile. I think it's been an evolution of proving that.
The case study shows that working with a partner that can handle that side of the business, handle localized currency, remit me my net dollars to continue doing my business is the core function and the core focus for the business in every aspect. I want to work with partners that are going to make it seamless, provide me the opportunity to expand, and not weigh me down with as much burden as possible. They are great at what they are great at. I am great at what I am great at. We find each other. We find the points of what needs review, and we continue to go from there. Like I was saying, for the idea that it can continue to kind of be the case, look at some of the largest platforms that handle commerce for most of the large brands in the digital space.
They're looking, and they found ways to integrate this into their service offering because that is now what was being asked of them. When you see a Shopify or a Salesforce work directly with a Global-e, I think it proves more to that point that merchants were feeling too weighed down by a process that is basically impossible unless you have a really large accounting and reconciliation team and find a partner that can just handle that and do it for you. As long as everything is reconciled properly, I provide a file to my accountants, to my auditors, and I close up my year, and that's just what it is. It doesn't need to be more than that.
Excellent.
With that said, I just want to thank you because I think, and I know we mentioned it earlier, coming out here away from the day-to-day, I know you're in Japan and Honolulu. I know you're in LA. I know it's not easy to get away, especially for any sort of speaking like this. Thank you. Thank you for the input. Thank you for challenging us as a platform and obviously the insight and guidance for the room today. Appreciate it.
Awesome. Thank you. Thank you for having us.
Thanks, Matt. All right. Thank you. All right. It is good to see all of you here. Thank you for coming and participating in our first-ever investor day. Yeah, start off with the financial strategy so we can—I'll try to keep pace so we can keep ample time for Q&A later on.
Since this is an investor day, I thought, why not start with asking why own Global-e or why consider owning the Global-e stock? I think that it has been illustrated in the previous sessions that we operate in a large and fast-growing market. Not only that, but we are well-positioned to capture growth, increase our share within that market, and continue to grow rapidly in the coming years. This is the first reason. Number two, we have a diverse, wide, and growing customer base across different industries, different verticals, from apparel to consumer electronics, across different geos from the U.S. through Europe to our latest penetrated market of APAC that we are very excited about, and different customer sizes from the smallest SMBs that are currently served on managed markets to the largest, most prestigious global brands. A large and diversified customer base.
Three, we have executed well, and I think that we have shown over the years a very strong financial performance. We have grown rapidly our top line while expanding our margins, and that has enabled us to show very strong cash generation. Just a few high-level points why we think Global-e is a unique opportunity within tech in general and within e-commerce enablement in particular. As I mentioned, we have built a very strong track record of execution. We are an execution-first company, and we are very proud in the fact that we have been able to achieve or even surpass all of our business and financial pre-IPO targets. You can see it here on the right-hand side, but I will double-click so we can see a few more numbers. As we already mentioned, our TAM has grown significantly in the last few years since our IPO.
On the one hand, there is organic growth. Direct-to-consumer, cross-border is growing fast, and this expands our TAM. But on top of that, we have been able to expand our offering over time and open up new TAM that now we are after. GMV has grown very rapidly, and we expect to see eight-time growth from the time of the last pre-IPO year, which is 2020 to 2025. Revenue, which is driven by GMV, follows the GMV trail, and we expect to see seven times growth from 2020 to 2025. As I mentioned, not only that we have been able to grow our top line rapidly, but at the same time, we were able to also expand our margins. As you can see, we have surpassed our non-GAAP gross profit pre-IPO target of 40% significantly. It has landed on 46% in 2024.
Our adjusted EBITDA in Q4 2024 is 20%, which was our long-term adjusted EBITDA pre-IPO target. All of that has translated very nicely into free cash flow generation. We have generated almost $170 million of free cash flow in 2024. You have already seen our GMV figures. I think I will just run through it shortly again. We have been able to grow very fast from $774 million in 2020 to over $4.8 billion in 2024, and we are expecting to hit over $6.3 billion in 2025. This is not just important because, obviously, all of us here in the room want Global-e to grow fast, but this also creates and enables us to build a significant competitive position. As we SCAYLE up, we become more efficient. Not only that, we are able to reinvest more and create more value for the merchants by expanding our product and building new capabilities.
This further strengthens our competitive position and enables us to go after this massive market. We believe that in the next few years, we can continue this rapid growth. In a few minutes, I will share with you our view of the next few years' financial targets. As you have seen in the previous session, we put the merchants in the front and center. Without the merchants, we do not have a business. The merchants stay with us, we grow with them, and they grow with us, as reflected in our NDR and GDR figures. Our NDR has been typically above 120%, and our GDR has typically been over 97%. The existing merchants play a significant role in our future growth as well, as I will illustrate a bit later when I discuss our growth algorithm. Our business is also becoming more and more diversified over time.
Our top 10 merchants generated 36% of our GMV in 2020. When we look at the 2024 figures, the top 10 merchants are now generating only 25% of our GMV. Those are actually much larger merchants. Over the years, we've been able to attract larger merchants to our platform. If we look at the top 10 list, at the current top 10 lists, only three of the merchants were part of the top 10 in 2020. Not only that our merchant base is diversifying, also our destination markets are highly fragmented. We have only three markets we generate more than 10% of our business. Those are the U.S., Canada, and the U.K., while we operate in close to 200 destination markets. Most of them are sub 2% of the total GMV that is generated on the Global-e platform.
Very fragmented merchant base, also a very fragmented destination markets. The outbound markets, we've seen a lot of dynamics around that in recent years. The U.S. currently represents over 45% of our business. It has grown very nicely for us in recent years. Thank you for that, Matt. Europe and the EU, I should say, and the U.K. combined represent also over 45% of the business. We have had, we saw great success in the last two years in developing new outbound markets, especially with APAC-based brands. We've invested in that in the last 24 months. While the others here, which are mostly APAC, represent just 6% of the business, they've been growing at a very fast pace. We believe that there is significant potential even in the near future and definitely in the long term in APAC. Revenue follows GMV.
It's driven by GMV and follows GMV pretty closely. It has grown at a slightly lower pace, seven times from 2020 to 2020 or what we expect to see in 2025, with a CAGR of 47% over that period. For those of you that are maybe newer to the story, I would like to take a minute and discuss our business model. As I think it is easy to understand, everything is driven out of GMV for us. We have two main revenue generation pillars. The first one is service fees, and the second one is fulfillment services revenue. Service fees are charged for the utilization of our end-to-end platform and is based on a take-rate model. As was mentioned earlier, we believe that that is the right model for us as it aligns the interests of the merchants and us.
We make money only if the merchants grow, as it is volume-driven. Fulfillment services are generated mainly from shipping and return services that we provide our merchants. The pricing of those services is based on rate cards that we offer to our merchants. Service fees revenues have contributed just below 50% of our overall revenue, while fulfillment services have been just above 50% of our overall revenue. However, when we look at the contribution to the gross profit line, it is slightly different as the margins of service fees are significantly higher. Service fees contribute approximately 70% to our gross profit line, while fulfillment services contribute the remaining 30%. Our gross profit growth has been outpacing our top line growth for the last few years. We are obviously very happy about that. We have been leveraging SCAYLE efficiencies. You have heard the term SCAYLE a few times today.
It is very important for us. It enables us to drive efficiencies and also invest more in optimization. This is what we have been doing for the last several years. In addition to that, there was an impact from the higher share of service fee revenues that grew over time. All of that has enabled us to increase gross margins from 32% in 2020 to around 46% in 2024. We believe that we can continue and optimize. We see more potential on operational leverage in the coming years, but we will continue to invest in optimization and to leverage our SCAYLE over time. We are running a very efficient business model. First and foremost, it's a game of, again, SCAYLE. As we SCAYLE up, we are able to drive efficiencies and, as I mentioned, more importantly, create more value for the merchants.
We call it economies of SCAYLE and also economies of skill as those data insights are also driving a lot of value for the merchants and, in return, helping us to grow the business for Global-e. On the R&D side, we have a multi-tenant platform approach, which enables us to be very efficient. All enhancements and developments, or most of the enhancements and upgrades to the platform, are basically open for all merchants that are active on the platform, making it very efficient. We develop a feature once, and then it serves the existing merchant base and is open to any new merchant that will join. Also, as Nir mentioned, we have a very efficient go-to-market strategy, which is based on the growing recognition that Global-e has in the market, but also a lot on the channel partnerships.
The channel partnerships enable us to be very efficient on the go-to-market approach and maintain our costs at a relatively low level. In addition to that, as we grew, we grew not as a pure SaaS company. In order to do well, we needed to really have a DNA of efficiency in the company. This is actually something that we continue to nurture, and we believe that it is in our blood to try and optimize and be as efficient as we can, while we believe that we will need to continue and reinvest in the growth of the business on the product side, on the sales and marketing side, but at the same time, stay very efficient as we have been able to do in recent years. All of that has enabled us to improve our adjusted EBITDA margin significantly.
Adjusted EBITDA is a very important KPI for us as it translates very nicely into free cash flow. Adjusted EBITDA margins have grown from 9% in 2020 to 20% in Q4 in the last quarter of 2024. Based on our guidance, we expect to see it hovering around that level in 2025 as well. It has grown 14 times from 2020, or we expect it to grow 14 times from 2020 to 2025. As I mentioned, this has translated, adjusted EBITDA has translated very nicely into free cash flow generation. Typically, free cash flow margins are slightly above adjusted EBITDA margins. As you can see, in 2024, we hit a record adjusted free cash flow margin for Global-e, reaching 22%, which we are very happy about. We do think that we can continue and improve this KPI over time.
I think we've discussed our growth algorithm in different ways throughout this day. Before we discuss our financial framework for the future, I thought it would be a good idea to jump again into this. We have a multi-component growth algorithm. The first component, the basic component, and the most important component for us is the existing merchants. Basically, existing merchants' growth is driven by two sources. The first one is what we call sales to sales. Basically, it is driven by the growth of the e-commerce market and the direct-to-consumer channel within it. On a typical year, this would be a high single-digit to a low double-digit number. On top of that, as mentioned previously, we have the land-and-expand motion that is relevant mainly for large brands that typically land on the platform with a subset of the geos or the lanes.
Over time, once they gain trust, they add additional markets. You have seen the Adidas example previously, and then there are a lot of other good examples. The second layer is merchants that have onboarded in the previous year that are still part of our NDR. Those merchants basically are growing very fast in the first year for two reasons. One is essence; the other one is technical. In terms of essence, there is a significant uplift when brands initially start working on the Global-e platform. As Nir mentioned, the typical uplift would be 40%, and we see that over the first few months of activity. That is a very important growth driver. On top of that, there is the annualization impact.
Those merchants onboard at a certain point in a given year, and then in the next year, it's the first time that basically we see a full year of activity. Basically, those two components build our NDR. The next one, which is extremely important, is the contribution of new merchants that have onboarded within a given year. That number has been growing from year- to- year. It's becoming—it is a challenge. As the base grows, we need to bring in more, but we have been able to do that. As Nir previously showed, 2024 was a record year for us in terms of signings. Not all of those merchants have already onboarded. Some of the onboarding will take place in 2025, but basically, this is the third piece of our growth algorithm.
The next one is new TAM or additional TAM in the short term, and we see a lot of potential, a much larger potential in the longer term. We have managed markets, Shopify managed markets, which is already contributing. We see a lot of massive potential for the future after we go through this few more months of investment with Shopify to align the merchant experience. We see also new opportunities. We have discussed B2B. It will take time to get there. We still have a lot of work in order to touch that TAM, but we believe that this is a massive opportunity. In the longer term, we can reach that TAM, and we can develop additional business initiatives.
On top of all of that, and that does not contribute to GMV, but it may contribute to revenue, we have a lot of value-added services initiatives, and this is definitely important in order to create more volume and better engage with the merchants, but also to generate additional take-rate. We have mentioned demand generation. We mentioned duty drawback, and there are additional initiatives in place. Moving on to our financial framework or four-year plan that we would like to share with you. As we have already reached or surpassed all of our business and financial targets or pre-IPO targets, we thought this would be a good time to share our vision of what we would like to achieve in the next few years. On the GMV side, we believe that we can continue to grow rapidly. The timeframe for this is 2025 to 2028.
We believe that we can continue to grow at a pace of high 20s to low 30s over that period of time. In terms of revenue, we believe that we can grow in the mid-20s. It is slightly lagging behind GMV because we do believe that Multi-Local will continue to play a role in our growth story. In terms of margins, as I previously mentioned, we do believe that we can optimize and continue to inject efficiencies into our business. We think a lot of it would be on the operational leverage side. In terms of non-GAAP gross margin, we believe that our target is to be at the high 40s. We believe that this could generate an adjusted EBITDA margin in the low to mid-20s. As I previously mentioned, adjusted EBITDA has historically translated very well for us into free cash flow generation.
We believe that we can get over this period to a free cash flow margin of in the mid to high 20s. We think that this is challenging, but a very achievable target that will enable Global-e to be a much larger, stronger, and a cash-generating company in the coming years. We believe that this plan will enable us to generate over $1 billion in free cash flow in this four-year period. We have different plans on how to allocate this capital. Our first priority, as always, as the opportunity we see is massive, is to reinvest in organic growth. We will continue to invest in our product, in our R&D, in building capabilities, and in our go-to-market while maintaining efficiencies as we did in the past. The second pillar is in organic growth.
While we don't have any specific targets at this point in time, we are looking at different opportunities, mainly for complementary product offerings and capabilities that can accelerate our time to market or inject new capabilities that we currently don't have in Global-e. We believe that after integrating flow and Borderfree, which are already well in place, this would be a good time to look at additional opportunities. The third pillar would be share repurchase. We are considering it. We don't have an exact timeframe for that or a specific volume we thought about, but this is something we are considering, and we may introduce in the near future. This is how we think about capital allocation in the coming years.
To summarize five key takeaways, the first one is that we build a very strong track record of execution, delivering on our business and financial objectives. We are also well positioned in a massive market, and we believe that we can capture additional share and grow rapidly in the coming years in a very efficient way, as we did in recent years. We will continue to prioritize top-line growth. Again, the opportunity out there is massive, and we will continue to do that. At the same time, we will also continue to optimize and build efficiencies. We believe that this is a key for our future success. We expect to generate over $1 billion of free cash flow in the next four years, 2025 to 2028. I will leave you with that. After setting up the stage, we can go to Q&A.
We're going to start the Q&A. I just ask that you wait for the mic to get near you for the benefit of the webcast.
Good afternoon, Brent Bracelin, Piper Sandler. For me, the big takeaway from the presentation was Multi-Local. The new disclosures here, this is a bigger business than the Shopify managed markets opportunity next year, almost 2x larger, growing triple digits. How big is the Multi-Local market opportunity? Could tariffs actually accelerate that Multi-Local business? Maybe for you, Ofer, could you talk about the unit economics of that relative to maybe gross margin impact, maybe lower take-rate overall? Just those three things, just given how big Multi-Local is and triple-digit growth, certainly much faster than I would have thought. Thanks.
Thank you, Brent. We do believe that the Multi-Local opportunity is massive. Some of it is, as presented, I think, in the session that Matt led is hand-in-hand working with current clients within their growth journey to go into a Multi-Local setup because it is more efficient economically for them and supporting also physical presence they are evolving into, etc. Most of it for us is winning business out of new TAM that we could not address before. I think that early this year, Logitech was the largest example of landing such a business that is Multi-Local by nature. We had a few smaller ones before, but it takes us into a single client that is a different SCAYLE. On the back of it, we believe that we will continue to win more. We see it in our pipeline. We see it in our funnels.
We direct our sales approach and sales team towards it. I do believe there's a massive opportunity that we will continue to see over there. You asked about the connection to that and to the tariffs. I think they are highly connected. Multi-Local will get a huge push out of tariffs. If merchants are afraid of a trade war that is coming, it will push them much faster towards, especially the larger ones, into their larger lanes, into a Multi-Local setup that would allow them to leverage economies of selling wholesale into the market, enjoying a lower hit on their P&L. This is where Global-e can actually leverage new capabilities we bring into the market. We spoke about the 3B2C.
3B2C can allow a merchant to avoid a local setup in market in order to go Multi-Local and just use a wholesale entity, registered entity without any operations linked to it, to import into a market, saving huge amounts of cash on duty and tax burden. Through Global-e, just continue selling domestically through a legal entity in country of Global-e that is buying it domestically from the importing company and selling it to the consumer. We have seen adoption of this model. We have a couple of large brands that are going to adopt that model to at least two large markets in the coming future. We believe it will be a key selling point going after new clients in the coming weeks and months.
In terms of the impact on economics, maybe I will just start by saying that this is mostly relevant for large brands. Building an inventory, not the 3B2C, the full Multi-Local approach, is building additional inventories in other markets has a cost associated with it and adds complexities. In terms of the impact on our financials, the main impact is on the fulfillment services side because now when the inventory is domestic, fulfillment becomes domestic as well, which makes it much simpler. It is also at a lower cost, which means that there are two alternatives. One is that the merchants would just handle it independently. Again, it's a relatively simple transaction in this case. Then we get no fulfillment revenue.
The other alternative is that in some cases, merchants want us to handle it end-to-end, just to put all that hassle aside and just focus on the brand and the product. In that case, also the take rates would be lower since now it's a domestic shipping transaction.
Hey, guys. Koji Ikeda from Bank of America. Thanks for doing this. Great presentation. Maybe a follow-up here on Multi-Local. It does seem like tariffs are a big driver for a lot of your companies to think about adopting Multi-Local strategies. While that's great for you're helping the customers get the product to where they need to for their customers, what's the driver for these customers to ever go back to what they were doing before? Meaning, could it be potentially a take rate accelerator for you as tariffs come off in the future or potentially not? Could we see take rates improve? Are these customers structurally changing the way and the way that they're thinking about getting their products to the end market?
Generally thinking of it, I believe it's a structural change. We don't see a lot of examples of merchants moving into a Multi-Local setup and scaling down again. We have seen a few. It's not that we haven't. We have seen a few merchants that took that step because they found it very compelling because the cost of domestic shipping looked much simpler. The time to ship a parcel to the client might be shorter. However, the level of SKUs that they had that required a level of inventory in country versus their SCAYLE in sales did not justify the savings that they had. They ended up maybe with something that looked on an order level, looked like a better commercial, but they ended up losing money from the new setup because they didn't have enough SCAYLE in order to take into the overheads of the double inventory, etc.
On that, I think that if you do it while you have already SCAYLE, to see it going back would be rare cases. There might be some that the tipping point for a decision was or will be the new tariffs because new tariffs, if you pay now an additional 25% on a retail price, and now you can move into a 3B2C model or a local setup that would be a 50% on a wholesale or a cost price, which is 50% of it, you save actually 12%, 10-12%. It's huge. It might drive a decision also from merchants that are a bit sub SCAYLE to actually do the model over time if those tariffs are actually removed. Will it happen? Will they SCAYLE back or will they stay with a new setup? I think time would tell.
Hi. Samad Samana from Jefferies first. I just want to say it's amazing. There's a lot to celebrate over the last four years since the IPO, so congratulations on all the success. Maybe a couple of questions here. First, just on Borderfree.com, you have 200-plus customers. What's the gating factor to maybe getting the rest of those 1,400 enterprise customers in the full install base to sell on it? Can non-Global-e merchants sell on there? Is that a potential customer acquisition vehicle? Essentially, just trying to see what both the existing base opportunity to get that to is and how you can attract others through it.
We have high aspirations for Borderfree.com. Yes, I'll start from the later. We do believe that if we build it right and we SCAYLE it to the level of SCAYLE it can get to, it will be a competitive tool for us to win more business in the market versus competition. Also from in-house showing and demonstrating, we can guarantee to you traffic in different countries at a guaranteed ROI that just to open the countries by yourself or try to grow within the country is an expensive adventure. However, in order to do it, we need to show that we're bringing success to our current clients using it. It's true for selling it outside. It's true for selling it inside. The early adopters, the 200 merchants, were happy with the explanations. They were happy with the understanding of the opportunity and embraced it.
I think that it will be a few waves of education for the rest of our clients' base in order to try and drive adoption. We do not expect to have 100% adoption across the platforms. We have merchants with very strong brands in their key location. Some of them will not join as we look into the future, but we do believe that a two-digit percent of our volume and a nice two-digit percent of our volume over time will adopt. Once they adopt, it is actually creating a network effect because once every merchant that joins the platform, actually from his own sales through the platform, from his own checkout, we have a tick box for Borderfree.com that people can opt in into Borderfree. This would SCAYLE the memberships.
If we continue to SCAYLE the memberships significantly and as we SCAYLE the platform, more joining it, we will have a tool that if you look at it for any single merchant out of Global-e, his own client's contribution into that platform is sub 1%. Actually, in return, you get 99% clients that are not your clients, which actually allows you to get to an efficient brand awareness and grow your brand in the market. We believe that once brands understand it and the SCAYLEs would bring it more and more and the success stories that you've seen, they just came out of the oven last week. It's fresh. We're building it now. It's coming now. We are doing learning. The platform we came out of the gate in November is not the platform that is trading now for Borderfree.com in March.
It for sure will not be the platform and the capabilities that you would see when you go into it in June. We are evolving. We have a lot to do. I believe it can be a great tool into our future growth and especially to our merchants' future growth.
Very helpful. Maybe just a quick follow-up. I think I saw on the slide that there's the indirect partners accounting for 60% of GMV. It might have been new GMV. Can you tell us who those indirect partners are? I think I have a suspicion on at least one. How do you diversify that over time just from a concentration standpoint? Thank you.
Okay. I think this is a good question for Nir as well. I will start and I will let Nir.
Respond as Ofer as well.
I think that the channel partnership has grown very nicely for us in the last few years. Some of it is driven by our efforts and some of it is just driven by the natural cadence of our recognition in the market. It makes it a lot more interesting for the parties to be involved in that. As Nir mentioned in his session, in many cases, there is also an inherent interest of the partner to provide us leads because the carriers will see more packages flowing through them. The payment processors will see more volumes of payment processing going through them and so on and so forth. I would say this is the framework and I will let Nir continue from here.
The immediate suspects, as you can believe, were on the board. It can span from DHL to Shopify. The beauty of it is that you would be surprised on the composition of these channel partners and what they bring to us with the names that are actually in that roster. Not only that, it's different names. They change all the time. If you look at 2023, SCAYLE as a partner brought us zero, nothing. The contribution of the GMV signed in 2024 from SCAYLE by itself was over 10% of our booked GMVs that year. If you look at FedEx, FedEx brought us nothing in 2023. FedEx gave us a few percentages already in 2024. You can SCAYLE it up and look at how it evolves. It can go into the likes of Accenture. We never worked with Accenture in the past.
Accenture is a gateway for very large brands that makes their decision with consultants. We just had a breakthrough for the first time. Accenture brought to us a client ready to go after they sold it a couple of weeks ago. It is evolving. It is changing, I think, and it will continue to propel our growth over time. It is not just the name you thought about. It is a much more evolving landscape of global, but also local players. It can be a domestic agency in Australia that fell in love with it and just go client by client in the roster and fueling around 15% of our growth in Australia. It can come from multiple places, but channel partnership is one of our key levers to future growth.
I just want to add on that, and Nir kind of teed it up, that apart from being a force multiplier for our growth generally in the markets that we already work in, it's also become an important component of expanding to new markets because historically, before we had the track record and the ability to really work with these global partners, starting a new market was just coming over, putting a flag in the ground, saying we're open for business and starting to go after clients. It's very hard. Even if you have a great track record in other markets, it's still very hard to get those first meaningful clients on board. Over the recent years, as we've gained more experience and more credibility to work with these global partners, it's also serving as an important component of us hitting the ground running, if you want.
We have seen that in markets near merchant Australia. Japan was also a great example of opening the business, not just with a strong team on the ground and a strong focus on the market, but also on the back of a strategic partnership from the get-go, in this case with TransCosmos and with the local DHL branch that really has enabled us to get out of the gate much quicker than we previously did when we opened new markets.
Hi. Way, way, way in the back. Thanks, Ken. I would certainly echo the thoughts in having you all join today. I have two questions. The first is kind of a follow-up to Samad's question. If you zoom out and think about the value-add services that's in your roadmap, broadly speaking, how will you ultimately monetize those? Is this really just trying to push more volume, more GMV into the platform, and you'll indirectly monetize some of those offerings through that? Is there an opportunity to maybe even change the business model slightly with what those services could be?
I think it's both. Depending on what's the service and how we decide to go with it into market. On the one hand, you have a service like Global Duty Drawback Program. Global Duty Drawback Program allows our merchants much more simplicity and allows a much better consumer experience because wherever you buy from the world, from a brand here in the U.S., once you make a return, you will be refunded in full. You will be refunded for the duty and taxes you paid in your country. And the merchant is actually kept whole as Global-e is taking that cost into our cost structure through the insurance plan that is Global Duty Drawback Program.
However, in order to make that insurance plan good for you as a merchant, Global-e developed duty drawback across multiple GOs, making our cost of trade offering that insurance cost-effective because in many countries around the world, I can actually reclaim the money back from the authorities that any merchant by himself would find it difficult or impossible to do. On that, yes, we are selling it. We are making a margin on it. It will affect our top line once it continues its adoption. Same goes into demand generation. Demand generation is a service that we are doing at SCAYLE. We are making it cost-efficient to merchants. We give a guaranteed ROI related to it.
For the first year now, we decided specifically even not to charge for it because we wanted to SCAYLE because there is an efficiency of SCAYLE once you get it into a volume. However, over time, yes, it will contribute to our take rates because we will charge for it. We will charge something that is much more efficient for a brand than to try to do it with Meta in multiple countries, etc. Over time, yes, we will charge for it. Some of the services are actually part of leveraging or giving you better capabilities. We will not charge for them direct as a service. If you look at 3B2C, we will allow you better access into certain countries to optimize your cost of trade. On the back of it, we believe that it will grow you faster.
If you grow faster because you have a better economic model into the market and you can be more aggressive in your demand generation operations, in your pricing, you will grow faster in market. We will get a % out of it because we're aligned with you on the business model. Some would be from that, some would be from actually charging from this bus.
Helpful. I guess I should have said scap. Or I could need them for the transcript. That'll be out from this. My follow-up is for you, Ofer. If you think about your 28 target model that you have out there, I think what's interesting in the Global-e business since your IPO is while you've had 11 percentage points of leverage in the adjusted EBITDA line, roughly speaking, you've had almost zero leverage though in your operating expenses. All the leverage has come in the COGS line, right? You've had 28% of your revenue flowing through your OpEx pretty consistently from then. Your 28 model kind of reverses that a little bit. You're going to get less leverage in the gross margin line. Where does that ultimately come from?
Is it just natural leverage in the model or will there be, I don't know, slightly different composition to think of in 2028? Thank you.
Yeah, as you rightfully mentioned, we expect things to slightly change in the coming years and we expect to see most of the margin expansion driven from operational leverage. I think that the main item that we can create efficiencies on, as Yehiam mentioned, is the R&D side. AI will play an important role. In addition to AI, we have also different initiatives. Also, SCAYLE plays a significant role here. I think that we have reached a SCAYLE that enabled us to create operational leverage efficiencies. We have been able to do that around G&A. I think we can continue and do that. We have the potential of doing that around R&D and around some of the sales and marketing components as some of it is variable cost on the sales and marketing. The rev share and some of the other costs are variable costs.
We definitely believe that there is a significant potential to gradually pull that operational leverage and improve margins.
Oh, great. Thanks. It's Pat at Citizens. Amir, it seems to me the biggest question is, can you guys keep executing against this opportunity, right? As CEO, what do you think are the top two or three things that you need to get right to make sure that your team can keep executing against it?
Yeah, I think first of all, you're right. I think what has brought us here to where we are today is a combination of a great market opportunity, a great model to seize that opportunity, and relentless execution in doing so. Honestly, I think these are also the components that would drive our growth forward. We covered some of those during the various presentations. One is continuing to innovate and continuing to push and have our team push to innovate across the board, enabling additional openings of new TAMs, new opportunities, and new ways to capture the existing TAM with both our existing merchants and the new merchants that are going to join the platform. I think the second component is continuing to find ways within our go-to-market strategy.
Part of it is, as we mentioned, leveraging more channel partners, making our sales processes even more effective and efficient going forward because there's no shortage of opportunity. It's about being able to balance between our wish to prioritize growth and grow the business across the board with keeping our reputation. I think you heard from our clients here on stage just how important and central the Global-e offering is within their ability to grow their business.
This is key for us in whenever we prioritize growth, but whenever we need to take a decision between growing that one or two extra percentages versus risking the reputation or our ability to support our merchants 100%, we will always choose to go for the service levels because we think that over time, this is what's going to enable us to continue and work and grow with these merchants and win that trust from additional merchants down the line. The way to do all of that is by remaining super focused. I think probably most of the work you see here, part of the management team, there are additional members of management in various roles around the world.
I think as a team, I probably wouldn't be exaggerating if 80% of our work goes into thinking about that, managing that, managing that downwards towards the respective teams, and making sure that everybody remains super focused on achieving those goals, but doing it in the most efficient way possible. I think with those components in place and our relentless focus on execution as a leadership team and as an entire organization, that's what's going to drive our success in the coming years.
Thank you.
Just one sentence to double-click on it. I think it starts and ends with our commitment to our merchants. If you look at the six people sitting here on the stage, everybody's wearing clothes only from our merchants. No one in management is allowed to wear anything that is not from a merchant. Unfortunately, it's not FIGS. My mother still regrets I'm not a doctor, but unfortunately, it's not FIGS. It goes from Hugo Boss to Sandro to Rag & Bone to Hoka to Adidas. You can go and taste each one with his own taste, but they're not allowed to show up with anything anywhere that is not from clients. That's part of a DNA. It starts at management, but it filters down. It creates a level of commitment.
We are partnering and we built our business on our reputation, our connection to merchants, and we will not lose this focus. This would stay with us wherever we go at whatever timeframe.
Good afternoon. It's Mark Zgutowicz with the Benchmark Company over here. Thank you for this afternoon. It's been quite informative. Just hoping we can maybe talk a little bit about managed markets. Obviously, you have two very different merchant bases here, and I think your go-to-market has evolved a bit over the last year or two. If you could perhaps just talk about the two primary learnings that you have gained there, and then sort of how that's changed your go-to-market. Do you have a different sort of addressable number in terms of Shopify merchants that you can monetize? Nir, you talked about perhaps two or three primary investments that you're making now, maybe a little more specific there and what that might mean in terms of incremental GMV coming from Shopify over the next 24 months. Thanks.
Sure. The managed markets, we launched it 18 months ago into GA. On the success side of it, I think we were able to perfect almost the onboarding of merchants into the solution. To hit 10,000 plus merchants active on the platform is a huge success for Global-e. You looked at our enterprise platform. In the last 12 years, we amassed 1,400 clients. That was what we were able to achieve and what we were able to cater for in terms of onboarding enterprises. With this platform in 18 months, we amassed 10,000 plus merchants, which is a completely different process at SCAYLE. However, as we evolved, we've seen that first, we had a lot of learnings about the size of the clients that are actually adopting it, why they adopt it, why those that don't adopt it say they don't want to adopt it.
Based on those learnings, together with Shopify, we decided that we need to do adjustments to our backend as priority. We prioritized and we know about some elements that we still need to handle on the consumer side, on the shopper experience. It can be down to returns and duty drawbacks, etc. However, as we see it in the backend, we need to streamline some of the basics of how the experience is for the merchants using Shopify combined with Global-e in managed markets versus using Shopify domestically in the way that the transaction is reconciled, in the way the payouts are working, in multiple ways that is not familiar for them or require them to use separate systems or approaches.
If we want the adoption to be growing exponentially and not to grow from 10,000 to 12, 15, or maybe 20 within quarters, and we want to do, I would say, a much stronger growth into the future, we need to address those issues. Shopify are experts in it. Shopify were able to build a million-dollar, a million merchant business. They have the expertise. We take their leadership on it. They have better guidance than us on how to do it. We are now together with them. Both teams on both sides are aligned on what we need to do. We are working to do it in the coming two quarters. Hopefully, this side of Christmas, we would launch, we would do a relaunch to the market of the solution with a lot of changes to the backend.
Got it. That's helpful. A quick follow-up, perhaps for Ofer. Just on the services take component, if you think about your long-term guidance, is the assumption there that that will continue to perhaps decline marginally, or do you expect any growth in that services take rate that's implied in your guidance? Thanks.
Yeah. Regarding the take rate in general, as reflected in this high-level guidance, we expect it to continue and moderately decrease. We expect that to happen mostly on the fulfillment services side. Again, the main driver behind that is the growth in share of Multi-Local that we expect to continue to see in the coming years. We expect service fee take rates to stay relatively stable. We do not expect to see any significant upside in the short term. In the longer term, if we are able to execute well on the value-added services, we might see some upside.
Over here.
Hey, good afternoon. James Faucette at Morgan Stanley. Wanted to ask about kind of tariffs a little bit, and I think it's something we're all grappling with and thinking about how you've incorporated those into your outlook. I guess my question is the following. I think you make a pretty compelling case for why the increased complexity would be really attractive to existing merchant customers and partners, as well as incremental ones. On the other hand, I think we're all grappling with a little bit what the elasticity of demand might look like and how you built that into your forecast, especially if you can tie it back to, you said that you'd had similar experiences in Australia and U.K., etc. What did you see in those markets? How did you flow that through?
Are you expecting like, "Oh, we're going to see twice as many merchants, but 10% reduction," or just any color you can give us so we can sensitize ourselves to that? Thanks.
Yeah, thanks, James. Of course, I'll put in the disclaimer that it's an evolving situation, and none of us know where we know where it started. I don't think anybody knows where it ends, potentially not even the people that are driving this. Putting that aside, I think our experience shows, and that's what we baked into our guidance going forward, is that yes, it may have some impact in the shorter term around consumer demand that is reflected in our kind of same-store sales figures. By the way, maybe not even because of pure economic reasons, just because of perceptions and because of just people reading in the papers that yes, this may lead to a recession, and sometimes these are self-fulfilling prophecies, even if there's no real reason for them to retract their shopping habits.
As long as the situation does not become nuclear tariff warfare, we think that within the realms of what we have seen, you mentioned Australia, there were other cases in recent years of countries that have introduced duties and taxes on low-value goods. We have seen at the end that the impact is not massive. Yes, the prices may go up a bit, but by the way, prices go up a bit irrespective of additional tariffs going into effect, just because brands sometimes update their pricing. At the end of the day, especially in the verticals that we concentrate in, the elasticity can absorb, I would say, normal levels of tariffs. In the longer term, on that, we are actually very confident that this will drive eventually more business to us.
On that, as Nir mentioned, I think earlier, we have pretty similar experience in a similar situation with the Brexit happening a few years ago. We've seen that in other cases, we've seen that with GDPR, we've seen lots of complex regulations that kick in. At the end of the day, and I think Michelle and Dan mentioned it when they spoke, that increased complexity is something that, as a brand, that's not your expertise. And that's you're happy, and rightly so, to make that the problem of somebody else, the problem of somebody who's an expert in that and who is geared to do that at SCAYLE. I think as these trade barriers amass, longer term, we're very confident that it's going to drive more business.
We're already seeing some early signs of that with merchants, both existing and new merchants approaching us, wanting to accelerate their thinking and their checks on what it would mean to work with Global-e, with tariffs being the most probable driver behind that.
Hey, guys. Will Nance, Goldman Sachs. Appreciate you taking the question. Maybe just to follow up on that last point you made, it seems like one of the big themes for today is the acceleration of Multi-Local and in part impacted by the trade situation. I'm curious if you've had conversations with existing merchants that say the increasing complexity means I want to give you more of my business that I may be doing in-house today, certain markets or geographies because the complexity is accelerating. I'm wondering if there's been evidence of that so far, if there's anything baked into your expectations in the near term, and if there's any way of sizing what your wallet share is with existing customers and where there may be the largest opportunities to expand that relationship over time. Thanks.
Yeah, I think it's on. I do think we're seeing that. I think it's conversations in two different streams that we're seeing it right now with merchants that, let's just say, have built out models that are looking to us to simplify where they're heading and what they're looking to achieve, which is just simplification and being able to run a single site with inventory position and leverage the gains of having inventory in markets. I think there's new conversations that are happening in markets that traditionally, with some of these global brands, we may not have operated where now we are. I do think when you look at the existing base, and I mean, we are having conversations on this often, right, with merchants that are looking to understand now who are at a SCAYLE, where do I put inventory next?
More importantly, how do I do that from a single site, yet leverage the inventory positioned in market, but then leverage the global entity structure behind it, which allows me to settle locally in a market that may not be a cross-border market for that matter? We are seeing it in the two streams right now in the field, without a doubt. It is a conversation that we are strategically having with all of our global brands, and it is only accelerating.
You see it with the brands that we just spoke about this morning. Large American brands that launched with us recently do not do with us Canada and now looking into moving Canada to Global-e because the cost of adapting to the changes is high on their side. We see it in Australia. We have a few examples already in the funnel of mid-size merchants with Global-e, but large merchants on the overall. The U.S., for example, is 40% of their business. They did it by themselves. Now they want to move it to Global-e because the cost of changing and maintaining it became just way higher. If Global-e can come with a solution such as a 3B2C that allows them the simplicity without doing any local operations now in-country, which is alternative to it, we have a fair chance of winning that as well.
A lot of opportunities now that are running around. I think that if we play our cards right over the long term, it will be a success for Global-e.
Appreciate that. On a different note, the commentary on Borderfree seemed pretty upbeat today, some of the recent success stories that you have with customers post the relaunch of the platform. I guess in the near term, do you see the renewed momentum that Borderfree has stabilizing the revenue growth in that platform? I know that you called that out as a headwind last year. Maybe if you could help think through what some of the recent kind of impacts on revenue growth have been from that platform and how those are likely to evolve. Thanks.
Unfortunately, the Borderfree platform is not rising back from the dead. We are sunsetting the platform. Borderfree, at the end of this year, the platform is going down, as we mentioned, and we guided for in the past. It's a completely different and separate business from Borderfree.com. Borderfree.com, we just loved the name Borderfree, so we used it in our demand generation growing business. We just borrowed the name. It is growing. We are very excited about it. The Borderfree platform by itself is end of life. It's going down in December. The current merchants that are left, trading volume is very minimal, and most of them have already migrated to Global-e. The last two large names are expected to migrate in Q1 of 2026.
Yes, they will go dark for a short period, but because of the time it takes them to migrate, our very legacy, I would say, client, it takes them time to migrate. There will be a quarter dark, but they will migrate. On the back of it, we will shut down the platform. We did take and build a side. We forked out the Borderfree.com business. This one is considerably scaling, and we do see it as a huge tool for our future. We did take also some of the services out of their core technologies that were based on a very good microservice technology. We took some of those services around tokenization, around GSS, which allows us to reconcile each and every transaction to see that what we send to the PSP is actually we get the same amount back into our bank account, etc.
They had some very good tools that we took in, and most of the development team, a very good development team, was, I would say, embedded into our different development teams around the world.
Hey, over here on the left, James McCarey from Fred Alger Management. My question is more broad on the guidance, which thank you for going out to 2028. It is a very long-term guidance, which is very encouraging. I wanted to ask if you had any comments or just any further clarification on your confidence, like what gives you confidence to go all the way out to 2028? What do you have the most line of sight into in your guidance? Do you have a lot of confidence about expanding gross margins? You can kind of guarantee that. Any kind of line of sight questions going out to 2028?
Obviously, when you provide a high-level guidance for a four-year period, you have less certainty on the year three and year four compared to a one-year guide. We believe that based on the fundamentals that we presented today, the strength of the market, the vast TAM that is out there, our capabilities, and the strong market positioning that we have, and the multiple growth levers that we have presented, we can achieve those targets. As we mentioned, we have proved in the last few years, we have a very strong track record of execution and of achieving our targets. We are quite confident that we can achieve those targets as well. Obviously, as we SCAYLE up, growth rates will slightly decrease. We have seen that in previous years, and you have seen that our guidance is lower compared to previous year's growth rate.
We are quite confident that we can achieve that.
I'll just take advantage of not being the CFO and say that we actually, if I look back to when we set our long-term targets as part of the IPO process, we have a much better line of sight now and much better confidence now in our ability to achieve these long-term targets than we had in 2020 and 2021 when we set out those goals. Hopefully that gives you a sense.
Andrew Bauch from Wells Fargo. Just wanted to, I know you gave guidance on the full year just a month ago, but there's been a lot of headlines between now and then, and would like to get a sense of activity levels as you kind of, as we were about to end the first quarter here, your confidence in the first quarter guide and in the full year 2025 guide. Apologies for the short-term question, but I know it's on a lot of people's minds.
Yeah, so yeah, as you mentioned, we are mainly discussing the longer term today. As we've mentioned during the earnings calls and also on additional calls that we had following that, we have expected and we see a certain level of, not a certain level, normalization of growth rates or consumer confidence going into the first quarter. We've expected that. It's currently trading around our expectations. As you know, it has been very volatile in recent years, and we have seen a lot of volatility during any given year. Basically, so far, it has been going more or less according to our expectations. As just a few weeks passed since we've guided for the year, I don't think we have much better visibility regarding Q4. We are quite confident that we can achieve the 2025 guidance.
You mentioned in the presentation M&A continuing to be part of the long-term strategy. Is any of that kind of contemplated in the guide you gave today? The industry has really kind of consolidated over the last couple of years with you guys being the beneficiary. Trying to get a sense of, are there other good assets in the market today that you think would be a good fit in the Global-e umbrella?
We haven't baked any explicit M&A into our guidance. To be honest, when we look at M&A, and I think Ofer alluded to that in his presentation, we are mainly looking at future M&A opportunities as opportunities to augment our capabilities and add new services or new features to our platform and our service offering where it would be more beneficial and more time effective and cost effective to buy versus build. We think that we are at that point, I would say, in our life as a company. That was, by the way, the rationale behind both the acquisition we've already done. As we've hopefully established, there's no shortage of growth opportunity out there. We're not going to seek acquisition for the sake of growth. We bought Flow because we wanted the technology stack.
We knew that we wanted to get deep into the SMB world, and we knew that we could not do that on the back of a platform that was built for enterprises in mind. Flow had just that. They had a great tech stack that was purposely built for a kind of self-onboarding, self-management with really kind of SMBs in mind. It lacked the SCAYLE and the know-how that only comes with working with large enterprises that can really drive the product forward and the SCAYLE forward. It was a natural combination. Yes, on the back of it, we got some business, but that was not the original intent. As Amir said, Borderfree was almost to the extreme because we actually took into account that we will have considerable churn off the platform.
We knew that many of these legacy brands are not going to be in a position to reintegrate into the Global-e platform, but we wanted the great marketing assets that Borderfree have built as a springboard to creating our demand generation offering, which you're starting to see today. Even those two acquisitions were aimed at kind of buy versus build for capabilities, and that's how we look at it going forward.
Next question's here.
Hey, guys. Maddie Schrage with KeyBanc. Nice to see you all again. Going back to your long-term growth drivers, thinking about B2B, curious to know if you have any customers currently utilizing Global-e for B2B or maybe any trials that you have so far. Also curious if those customers would be more likely to take your Multi-Local offering. Also wondering if the platform today is equipped to handle B2B or if you need to do additional investments for the platform.
We do have a small portion of our business that is B2B today as well. However, it's a B2B that behaves as a B2C. It can be workshops that are buying spare parts from Land Rover. It can be a beautician or a beauty parlor buying from one of our cosmetics brands to our shop. It goes as a parcel, both of them, as a parcel that behaves as a B2C. It's within the realms of being eligible for being a personal import, not a formal clearance, etc. It does not require a freight forwarding. They do not have credit accounts that we need to charge a credit account instead of a bank transfer or a payment in a credit card. On that aspect, we do have them. We are able to zero-rate VAT, for example, within Europe.
You type in your business number, we recognize, we do a check, we run an API call, we see that you are an eligible business. Actually, you're zero-rated for VAT. Instead of paying now a 19% German VAT, you're paying zero at the point of transaction as you're qualified as a business. Some of it we have built in, but we need to do much more if we want to do it at SCAYLE. The big SCAYLE is doing business in certain countries as they are IOR, Global-e becoming the IOR, importing formal clearance into the country. It's coming out of offering delivery solutions that are freight forwarding solutions. Once we evolve into that, into supporting credit accounts, etc., I believe that we will be able to take it much more into the larger B2B opportunity.
I think we have time for three more questions.
Oh, Nir one for you. Just as we think about the channel bookings and sorry, I know you're getting all the questions here, but just what are your opportunities for incremental channel partners? I know you mentioned Accenture, but just thinking about new geographies and new in markets, how would you think that bookings mix should evolve over time?
Oh, you can ask Matt. My view, they should grow. No, in my view, no, no, you can ask him about his complaints on me. My view, they should grow dramatically over time. I think Global-e is on the launchpad, and the fact that we only made $1.1 billion and not $1.5 billion is that Matt and his team here and the other equivalents around the world do not run fast enough. We gave them an amazing tool. They need to leverage it. Putting jokes aside, I think that we are now in a place where we can win much larger businesses than what we could in the past. If you ask me and you look at new bookings into the future, when I look into a long-term strategy, my thoughts on the new bookings is, how do I get Apple to work with Global-e?
I already get into consumer electronics. I was able to launch Logitech this year. I start to get credits that I'm eligible within consumer electronics. Now, how do I get Samsung? How do I get Apple? How do I get a billion-dollar GMV from a single client? How do I get them to be convinced that instead of using a distributor in Israel? Today, if you want to buy an iPhone in Israel, you need to go to iDigital. Who the fuck is iDigital? Why do I need to buy from them? I want to buy from Apple. There's no reason that I can't buy from Apple. I think that over time, we will be able to get there as well. I think we have a tremendous business opportunity. It's evolving over time.
If you'd ask me five years ago, would Adidas be a large client and growing? I would say this is my aspiration. This is my dream. Disney, that's a dream. They're already here. I think the next dreams are cracking into Samsung, cracking into Apple, finding a way to work with doing B2B or B2C for NVIDIA and others. I think it's doable.
Yeah, this is Paul Lee from Tamasek. Just a quick follow-up to that question. I mean, as you mentioned, the platform has evolved quite a bit, and you've been able to get larger and larger customers. I mean, how much more you're doing with customer segmentation among your enterprise customers to just optimize that lifetime value, but also make sure there's good efficiency in terms of go-to-market and development resources, but also just for your smaller merchants and your platform, what could be some of the pricing opportunities to just increase their lifetime value?
In terms of pricing, as I said, and said that earlier as well, merchants are our partners. We never lose focus on the ball. We need to grow their business in order to make more money. We do not need to charge them more money. I do not think, and I do not believe, at least not in the positions we are in the company, that trying to increase pricing would be where we get leverage. That is not where we are heading. I think we can bring much more value into the partnership and get paid for the extra value that we bring. That is our focus. That would be our focus in the future. I think that this model of business where we make money, where our clients grow, enables us to be aligned with them on their growth target and not try to take an additional cut out of what they do.
I think it makes us a better partner, and it makes them stick with us for the longer period of time. As you can see from our multi-year GDR, we intend to keep it. It does not take into account that, yes, we want to grow our margins. We did it over the years, but we do it out of going into new geographies, going into new verticals, going into new segments of businesses, and we will do much more of it from value-added services in the future as we now have a very large install base, and we can actually give them more services and take a share in different activities we did not take share in the past.
I just want to augment that with their.
She's happy.
Yeah, Michelle is. She wants that in writing. I think also another component, which is kind of implicit in everything that you heard so far, is that a lot of the product innovations that we showed you and that Yehiam showed you around all the different aspects of our product and our constant strive to add more and better and more diverse providers to our ecosystem, a lot of it is also driven not just to attracting new customers and entering new verticals, etc., which is very important, but also to better our performance and use our data and those insights that we talk a lot about to better our performance across all our merchant base. Even smaller merchants that are maybe trading their entire global potential with us, they're not just trading a subset of countries. They're trading all geographies with us.
Even for those, as we better our sharpen our insights and better our performance, it's aimed at that as well and an increase of 1% in the conversion rate across the board because we were now doing better on, let's say, acceptance rates on payment acquiring and doing automatic reroutes across different payment providers in order to give a better consumer experience and heighten acceptance rates. That's something that we do that impacts our entire merchant base. A lot of our product innovation focus goes into that because, as Ofer showed you, our clients, they stay with us for a long time. They grow with us. That's a big focus element for us as a company. I think we're getting signs here that the last question.
Yes, Arthur Weiss with Kingland. Just a kind of a bigger picture question. What are the greatest barriers to global brands joining the platform? When you look out to 2028, do you think that top 10 customer profile will look different in terms of who they are and what % of GMV they represent?
I think that, and I allow myself looking at our history just from four years ago, our top 10 clients, seven of them were not with Global-e in 2020. The SCAYLE of those seven is much bigger than anything we had in 2020. If I look forward into 2028, if we are able to deliver on what we think we can in terms of winning new size of enterprise merchants coming through channel partners in verticals we could not do before, I do believe we will have new merchants into our top 10. More than that, I think our top 10 average size of a merchant would be double what it is today.
Lunch is going to be served down the hall past where you had breakfast.
Thank you very much. We do not want to keep you from lunch, but we will be around so we can continue to discuss any additional questions you have over a fuller stomach. Thank you once again for coming here today. Thank you to everybody on the webcast for joining us. Unfortunately, you are not going to be able to enjoy the great food, but we very much look forward to our continuous interactions with all of you, both in our quarterly interactions and in the coming investors as they will hold. Thank you very much.