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As the stock market cooled off last year, it led to a lack of startup IPOs. This could change soon. The Wall Street Journal reports that Klaviyo, the Boston-based marketing automation startup that has raised over $775 million, will pull the trigger later this year.
If it’s true that the company hired bankers to prepare for an IPO, as the article claims, Klayvio could help end a long drought of tech startup IPOs. If its debut goes well, it could help open the gates for other companies that have been holding back and don’t want to be the first to go public in the current economic climate.
Klaviyo is as good a candidate as anyone, a company that’s raised a boatload of cash. The most recent fundraiser was in May 2021, raising $320 million at a staggering $9.5 billion valuation. Last August, Shopify raised another $100 million per Crunchbase.
But in today’s economic environment, investors aren’t betting on growth at any cost like they are in 2021. Instead, they want operational discipline, which has led to layoffs at big companies like Alphabet, Meta, Microsoft, Amazon, and Salesforce, as has been the case with tech companies was tempted to satisfy investors’ hunger for lower operating costs.
Klaviyo joined the trend when it laid off 140 employees last month, TechCrunch reported. That could be part of an effort to streamline costs ahead of a potential IPO to make the company more palatable to nervous investors.
The Wall Street Journal reports that the company has generated nearly $600 million in annual recurring revenue (ARR), a popular way of measuring revenue among software companies. The Journal also reports that the company is profitable, although what that means isn’t clear to us; Adjusted EBITDA and GAAP Net Income are different beasts.
There are other names in the mix when we consider which company could break the IPO deadlock. Turo, a peer-to-peer car rental company, has kept its documentation warm for the public offering, TechCrunch recently reported. Reddit, a collection of online communities, and Instacart, a grocery delivery service, are among the list of tech companies poised to go public this year. Other candidates could include big data company Databricks, which was worth $38 billion last year, and Lime, a scooter unicorn.
The company did not respond to a request for comment on the article.
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