Klaviyo IPO: Everything you need to know about Klaviyo

What do we know about the Klaviyo IPO?

Klaviyo is expected to start trading on the New York Stock Exchange under the ticker ‘KVYO’ on Wednesday September 20. The Boston-based SaaS company has experienced robust growth in recent years, and analysts are hopeful for success in wake of listings from British semiconductor designer Arm and grocery tech giant Instacart over the past week. 

Klaviyo offered 11.5 million shares in the IPO, and an additional 7.7 million were offered by shareholders. Klaviyo priced its IPO at $30 apiece, which was higher than its original targeted range of $27 to $29. That will raise about $345.2 million for Klaviyo. 

Shares that were available in the IPO were Series A shares and provide one vote each, and current owners will have their shares transformed into Series B, granting 10 votes each. Klaviyo has revealed there is no intention to pay cash dividends on capital stock.

If successful, the IPO would be one of the largest US listings in years as most companies have delayed plans to go public due to market volatility.  

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How to trade the Klaviyo IPO

Once Klaviyo has listed, you’ll be able to trade its shares in the same way as any other stock on the market.

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What is Klaviyo?

Klaviyo is a Boston-based email marketing software startup founded in 2012. At its founding, Klaviyo was intended to serve as a database for e-commerce data focusing on personalised metrics most competitors overlooked. It wasn’t until cofounders Andrew Bialecki and Ed Hallen began designing a system that could import customer data into email that the current iteration of Klaviyo began to take shape.

Today, Klaviyo is an email marketing service for e-commerce brands that leverages its own customer data, so clients don’t have to rely on third-party providers to segment customers. At the time of filing, Klaviyo reported serving over 130,000 customers.

Klaviyo’s offerings intentionally focus solely on email and SMS marketing, ignoring social media platforms. The company leverages its data collection and management tools to create extensive in-platform databases. Customers can use this data to create detailed no-code email campaigns and flows.

Eventually, Klaviyo hopes to move email marketing from targeting narrow audience segments to targeting single customers according to a statement by CEO Andrew Bialecki.

How much is Klaviyo worth?

The Klaviyo IPO gave the company an initial valuation of about $9 billion, in-line with the price tag it earned during its last funding round back in 2021.

Is Klaviyo profitable?

Just about! Klaviyo delivered net income of $15.2 million in the first half of 2023 as revenue jumped 54% from the year before to $320.6 million. That follows on from the losses we saw in 2022. 

What is Klaviyo’s business model?

Klaviyo generates revenue through tiered subscription services to its more than 130,000 customers. Tiers are based on the number of consumer profiles and number of email and SMS messages sent per month. Klaviyo claims to be invested in the growth of its customers in order to upgrade them to more expensive subscription tiers.

Moving forward, Klaviyo is also looking at developing guided software features to help customers make the most of their data. One representative told Tech Crunch they are not focused on “buzzwordy AI features” but instead on how to save the customers time and provide tailored recommendations to increase engagement.

Monthly subscription tiers range from $35 per month for 2,500 monthly email sends to more than $2,000 per month and 2 million monthly email sends.

Who are Klaviyo’s competitors?

Klaviyo has dozens of long-term competitors in the field of email marketing. Mailchimp, Sailthru, Twilio and Hubspot are all notable email service providers (ESPs). There are also integrated email management systems within larger SaaS providers such as Salesforce Marketing Cloud, Adobe Marketo and Oracle Eloqua.

Those integrated systems belong to CRM or design software, while Klaviyo only focuses on email and SMS marketing. Klaviyo distinguishes itself by marketing as an analytics engine powering email marketing. Because email marketing is a well-established field, small distinctions can make a big difference between competitors. Klaviyo’s distinction is the detail they provide campaign and flow tools powered by Klaviyo’s extensive data storage and analytics.

However, potential customers must determine if these features are worth Klaviyo’s high price tag. The SMP is considerably more expensive than its competitors. For this reason, most of Klaviyo’s customers are small-to-medium-sized (SMB) and pre-enterprise businesses whose campaigns don’t exceed 100,000 inboxes.

Who owns Klaviyo?

Klaviyo ownership is split among its cofounders and several institutional private investors including Summit Partners and Shopify. CEO Andrew Bialecki owns a 38% stake, Summit Partners 23%, Ed Hallen 14%, Shopify 11% and venture fund Accomplice 6%. The remaining shares are split among directors and executives.

Klaviyo management team

Cofounder Bialecki and Hallen began to build out the management team in 2015, with Hallen leaving the day-to-day company management to move to California and Bialecki assuming the role of CEO. As of September 2023, the Klaviyo management team is as follows:

• Andrew Bialecki – Cofounder, CEO and director
• Ed Hallen – Cofounder and director
• Amanda Whalen – CFO
• Allen Chaves, Jr. – CTO
• Landon Edmond – CLO and general counsel
• Steve Rowland – Board President
• Jennifer Ceran – Director
• Chano Fernandez – Director
• Ping Li – Director
• Michael Medici – Director
• Roxanne Oulman – Director
• Susan St. Ledger – Director
• Tony Weisman – Director