BigCommerce declined from a market high of $130 in August 2020 to the current price of ~$6.70 per share.
What explains such a drastic decline for BigCommerce?
BigCommerce’s decline from its market high of $130 to around $6.70 per share is extreme, and several factors contributed to this drastic drop. In contrast, BigCommerce’s most similar competitor, Shopify, saw a peak stock price of $169 in 2021 and experience a similar decline but has since rebounded and is trading at appx $110/share in the first week of March 2025.
1. Overvaluation at IPO and Early Hype
BigCommerce went public in 2020, right as COVID-19 lockdowns created many hobbyist day traders interested in investing in SaaS companies. This excitement for SaaS companies, including e-commerce platforms, was all the rage due to the surge in online shopping, as people were unable to or were uncomfortable shopping from brick-and-mortar stores. The stock reached unsustainable valuations, much like other tech stocks.
2. Slowing Growth and Competitive Pressure
BigCommerce has struggled to maintain ARR (annual recurring revenue) growth, especially compared to Shopify, which is dominating the e-commerce SaaS market, ESPECIALLY for the lower end of the segment. If you ask me, BigCommerce has had a hard time marketing its brand and differentiating itself from Shopify for most of the market, except for shooting, hunting, and outdoor segments. The company’s growth has slowed to nearly zero (6.1%, according to Yahoo Finance), raising concerns about its ability to compete long-term.
3. Profitability Issues and High Cash Burn
BigCommerce has historically operated at a loss (also according to the above-linked Yahoo article), relying on revenue growth to justify its valuation. As growth stalled out, investors became more critical of the company’s ability to become profitable. As reported by Gary Alexander in an article published on Seeking Alpha, layoffs in 2024, a new CEO, SVP, and cost-cutting tactics suggest the company is focused on profitability and growth. Still, it may be too late to avoid long-term damage.
4. Rising Interest Rates and Macroeconomic Factors
Investor markets have moved away from unprofitable tech stocks because of rising interest rates, which has significantly impacted BigCommerce. Investors now prefer companies with strong cash flow and profitability, which BigCommerce has struggled to deliver.
5. Market Sentiment and Institutional Sell-Offs
As their stock declined, many investors cut their losses, harming optimism and creating hesitation from people who watch the industry closely. With the stock now trading at a fraction of its 2020 value, many investors view it as a risky bet rather than a high-growth opportunity.
Are BigCommerce customers at risk?
Right now, BigCommerce’s financial struggles are not a threat to their customers, but there are long-term risks that merchants should consider:
Short-Term Stability (0-12 months)
- Still Generating Revenue: BigCommerce has a strong ARR from its subscription-based model, even though growth has stalled.
- Cost-Cutting Measures: Recent layoffs indicate they are working to improve financial stability.
- No Immediate Bankruptcy Risks: There are no signs that BigCommerce is at risk of shutting down operations.
Long-Term Stability (1-3+ years)
- Cash Flow Concerns: If revenue continues to stagnate and cost-cutting measures aren’t enough, the company may struggle to cover operational expenses.
- Competitive Pressure: If Shopify and other rivals continue to grow while BigCommerce remains stagnant, they could lose more market share, making survival more challenging.
- Potential for Acquisition or Business Model Changes: If struggles persist, the company could seek a buyout, shift focus to enterprise clients, or change pricing structures, all of which could impact existing customers.
BigCommerce customers don’t have a reason to panic, but it may be wise to watch them. If things don’t get better in a year, their long-term future becomes a concern, making it critical for customers to assess their reliance on BigCommerce.
A Brief Explanation of BigCommerce and SaaS.
BigCommerce (BigC) is a Hosted SaaS company. Hosted SaaS (software-as-a-service) companies are fully managed systems. Since this means nothing to most people, here is a simplified breakdown.
- SaaS (Software as a Service): Cloud-based service (someone else’s computers) where customers pay a subscription instead of owning or maintaining their own hardware & software.
- Hosted: The provider manages the entire infrastructure. Servers, databases, and software (aka app or application) are all the provider’s property.
- Commerce Platform: This is the underlying software or framework that provides the tools and functions of an internet store. These functions include shopping carts, payment processing, order management, customer and user management, and more. It is often thought of as “the website,” but this is misunderstood.
Still confused? That’s ok.
A hosted SaaS is meant to make building and operating a web store easier.
- Easy to set up: Easy is graded on a curve. What is easy for some is impossible for others.
- All-in-One Tech: But not really. The SaaS handles hosting, security, software, and no-code connection options with other systems you’ll need, such as payment processors, shipping software, marketing tools, etc.
- Scalable: The service can grow as your company grows. Basically, they can handle a tremendous amount of traffic growth to your store without overwhelming the host server or outgrowing the app’s capacity.
The tradeoff? Customization and Control.
What are the downsides of a SaaS like BigCommerce?
Companies that rely on their platform cannot easily migrate to another. Every client store’s architecture is uniquely structured to work on BigCommerce. If BigCommerce were to fail, any store on that system would need to be rebuilt completely.
Should this be a significant concern for their customers who depend on BigC in the long term?
Yes, this should be a factor for businesses investing in an eCommerce platform for the long term, since BigCommerce is a hosted SaaS and customers are locked into their ecosystem.
What are the risks if BigCommerce financial conditions don’t improve?
- Slowed updates and improvements: In 2024, BigCommerce laid off 30% of its workforce. This could mean stifled innovation, improvements to its platform, and poor customer service.
- Decline in Customer Support: When companies need to reduce expenses, human customer support is often reduced and replaced with self-service documentation.
- Price Increases: Struggling SaaS companies often increase pricing and restructure service tiers by limiting features to improve profit.
- Substantial cost to switch systems: Hosted services, including BigC, have proprietary data architectures. Businesses can’t simply migrate to another host or export their store to another platform. Moving to Shopify, Magento, WooCommerce, or any other software would require a complete rebuild.
Businesses that already utilize BigCommerce should not be concerned enough to switch just yet. Particularly because the cost and disruption to any business when migrating from one eCommerce CMS to another can be significant, so the juice may not be worth the squeeze. On the other hand, assuming they’ll remain stable for the long term, is also… risky.
Those companies who look to build a new eCommerce website in 2025/2026 should think long and hard about this decision and consider the stability of a resilient, open-sourced shopping cart system like WooCommerce.
By Steve Buck, founding partner of Black Tie Digital Marketing.