Marketing automation company based in Boston Klaviyo Inc. (NYSE:KVYO) was one of the first big-name companies to go public last month, setting the trend for multiple initial public offerings (IPOs).
Powered by the Canadian e-commerce giant Shopify Inc. (NYSE:SHOP), Klaviyo has remained resilient despite the murky backdrop of its IPO revival. Klaviyo shares have fallen 3% since their market debut, compared to grocery delivery platform Instacart’s 24.4% decline so far.
“Klaviyo is a shining example of the tremendous impact Shopify’s app and partner ecosystem can have on the next generation of commerce solutions for independent brands,” said Shopify President Harley Finkelstein. “Klaviyo has become invaluable to hundreds of thousands of merchants, helping them better understand their customers and engage them in a highly personalized way across so many touchpoints. Klaviyo’s success has been amazing and we are excited to take this next step in our already strong partnership to make it even easier for Shopify merchants to grow their business.”
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Successful IPO
Klaviyo listed its shares at an IPO price of $27 to $29, but on the first day of trading the stock opened at a premium of $32.06. The marketing automation startup was seeking a fully diluted valuation of about $9 billion, slightly below its 2021 valuation of $9.5 billion.
While Klaviyo initially focused on serving online businesses in the e-commerce sector, Klaviyo saw increasing demand from businesses in various other industries, including restaurants, travel, events and entertainment. The startup’s total customer base exceeded 130,000 as of June 30.
The story goes on
According to the prospectus, Klaviyo has achieved significant revenue growth, with a 51% increase in the most recent quarter bringing revenue to $164.6 million. For the 12 months ended June 30, Klaviyo’s revenue increased 56.5% year-on-year to $585.1 million, with a net sales retention rate in dollar terms of 119%.
The company has moved into profit, reporting a net income of $10.9 million – a significant turnaround from last year’s loss of $11.7 million.
Founded in 2012, Klaviyo rose to unicorn status with a pre-IPO valuation of $9 billion. Still, retail investors who missed out on Klaviyo before its IPO can invest in similarly promising marketing automation startups like AppMail for as little as $500.
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Powered by Shopify
Shopify is one of Klaviyo’s most significant supporters and key business partners. The e-commerce software provider owns about 11% of Klaviyo’s shares and made a sizeable investment of $100 million in August last year.
At the end of 2022, Klaviyo reported that approximately 78% of its annual recurring revenue, which represents the value of its active paid subscriptions, came from customers who are also Shopify users.
“We love working with the market-leading platforms,” said Andrew Bialecki, CEO of Klaviyo. “When we initially decided that we were going to focus on retail companies and consumer companies first, we said who the best platforms out there were the most innovative. Obviously, Shopify was at the top of that list.”
Through the partnership agreement, Klaviyo assumed the role of preferred email solution provider for Shopify Plus and gained early access to upcoming Shopify development features, facilitating the rapid advancement of essential technologies designed to help merchants adapt to recent changes in online marketing .
Given Klaviyo’s already established presence in the Shopify App Store, this partnership is expected to significantly improve merchants’ prospects for improving customer relationships in an ever-evolving marketing landscape.
“Our goal has always been to understand our customers – and their biggest challenges – and create the most popular product that solves those challenges,” Bialecki said. “Partnerships with leading platforms like Shopify that share our values and mission are critical to how we help solve the challenges creators and brands face. We are excited about what this continued partnership means for our customers.”
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This article, “Synergy In Action: Klaviyo’s IPO Triumph With Shopify’s Backing,” originally appeared on Benzinga.com
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