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Sunday, September 19, 2021

Global-E (GLBE) has an amazing mechanism to succeed

If you want to know what is to follow without reading  further, it is this: Global-E (GLBE) has an amazing mechanism to succeed. I am glad I own shares of this company. 

I was most interested in how the company works and how it is going to keep the flywheel(s) spinning. Using the information present in form F1 that was filed with SEC by the company (Sep-07-2021), I generated a unsupervised semantic network model. The figure is shown below,

Figure 1: An unsupervised network analysis of Global-E (GLBE) business overview based on SEC F-1 filing data

Figure legend:

  1. Merchant side concepts are shown as green nodes to the left
  2. Shopper side concepts are shown in pink nodes on right.'
  3. The edges, (lines) connecting the nodes are relations that were abstracted from the SEC filing.

1. GLBE has plenty to offer the merchants (green square shape on left), which makes it attractive for a merchant to sell on their platform. Success of the merchant is in turn a measure of success of GLBE
2. GLBE also makes it extremely easy for shoppers to buy (Pink square shape on right) across boundaries with all the facilities it has to offer (see figure 1, pink nodes in capital letters as well as figure 2 below, this is from their F-1 filing)

Figure 2: From Global-E F1 filing with SEC Sept 2021


Two Key observations are revealed in the network figure (this is why I love this type of modeling, it allows to read between the lines).

  • Observation #1: Offloading complexities occupies a central role in the workings of this set up. This is the central tenet of Global-E's workings and this is the lynch pin around which their success rests. And they are doing a great job at it. 
  • Observation #2: The interface between merchant and shopper is right at the payments, pricing and duties/taxes nodes. The alignment of this interface (payments, pricing, duties/taxes), is the crucial solution of cross border commerce. This is the under pinning platform for the 'off loading of complexities' central node.

This is a fantastic network model, that the computational network algorithm has generated. This is purely based on textual and conceptual information in the filing. I am amazed at the sheer simplicity and extreme robustness of the the model which reflects the values of the company. I am pleased I am invested in the company and would not mind adding more soon!

Disclaimer: I own shares of GLBE. Data obtained from F1 filing, SEC and public sources.