Carson Shold and Paul Pritchard both worked at Shopify for years — Shold as a front-end developer and Pritchard as a designer — before leaving the company and teaming up to launch a business that served users of their former employer’s platform.

They launched Archetype Themes, which offers a variety of premium ecommerce themes that are now used by more than 60,000 Shopify merchants. Archetype’s Impulse theme was ranked as the most popular on the Shopify Theme Store, the company said in August of 2021.

While the co-founders declined interview requests for this story, their tenure at Shopify clearly offered insight into the lucrative world of theme development for the e-commerce tech giant. The duo, which founded Archetype Themes in 2017, recently sold their company for $20 million upfront to WeCommerce, according to a press release on the deal.

The details of Archetype Theme’s sale to WeCommerce

WeCommerce’s upfront $20 million represents a multiple of approximately five times Archetype’s EBITDA, or earnings before interest, taxes, depreciation, and amortization, the company said. That equates to roughly $4 million annual revenue for Archetype at the time of its sale. Archetype will continue to operate as an independent brand after the acquisition, the company said.

Through the deal, WeCommerce will own five of the top-seven most popular paid themes in the Shopify Theme Store, the company said in a press release. WeCommerce, a publicly-traded company in the U.S. and Canada, provides online merchants a suite of ecommerce software tools in the Shopify partner ecosystem

WeCommerce and Archetype also agreed to a $12 million earnout as part of the deal. Earnouts are a post-closing payment or payments that are contingent on the acquired business satisfying negotiated performance goals after closing. They require founders to stay on board in some capacity with the new company after the closing, and can take years to wrap up.

Archetype’s earnout would be up to $4 million if it achieves certain EBITDA targets by Dec. 31, 2021, and an additional $8 million if it hits certain goals by the end of 2022, according to the press release.