The New York Stock Exchange welcomes executives and guests of Klaviyo, Inc. (NYSE: KVYO), on Weds, September 20, 2023, to celebrate its initial public offering. To honor the occasion, Andrew Bialecki, Co-Founder & Chief Executive Officer, and Ed Hallen, C
Klaviyo, a marketing automation company, made its debut on the New York Stock Exchange on Wednesday, causing its shares to surge by 23% to $36.75. This milestone marks the first significant IPO for a U.S. venture-backed software company since late 2021.
The IPO valued Klaviyo at over $9 billion on a fully diluted basis, with 19.2 million shares priced at $30 each. The company sold 11.5 million shares, which resulted in adding $345 million in cash to its balance sheet. Klaviyo’s valuation was at $9.5 billion in a private financing round in 2021.
Instacart, a grocery delivery company, also went public recently and experienced a 40% increase in its stock price on its first day of trading. Klaviyo and Instacart are attempting to revive the tech IPO market that had been dormant for nearly two years, with the exception of Arm, a U.K.-based company controlled by Japan’s SoftBank.
HashiCorp and Samsara were the last venture-backed software companies to hold IPOs in the U.S. They both debuted in December 2021 when the Nasdaq was at its peak. However, the following year saw a downturn in the tech industry due to inflation and rising interest rates.
While the Nasdaq has rebounded, less mature and unprofitable businesses have not fully recovered. Instacart’s valuation, for example, fell from $39 billion to just over $11 billion. Klaviyo was founded in 2012 and offers marketing services using user data. It primarily serves online businesses but has seen demand from other industries like restaurants, travel, and events.
According to its prospectus, Klaviyo reported a revenue growth of 51% in the latest quarter, reaching $164.6 million. The company has become profitable, with a net income of $10.9 million compared to a loss of $11.7 million the previous year.
Shopify, an e-commerce platform, is one of Klaviyo’s major backers. Last year, Shopify invested $100 million in Klaviyo and currently owns around 11% of its shares. The majority of Klaviyo’s recurring revenue is derived from customers who also use Shopify.
Andrew Bialecki, CEO of Klaviyo, expressed their preference for working with market-leading platforms like Shopify, allowing Klaviyo to focus on improving the customer experience. Klaviyo’s customer base has grown to over 130,000 as of June 30.
— CNBC’s Annie Palmer contributed to this report
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