Boston-based marketing software firm, Klaviyo, has priced its initial public offering at $30 a share, according to a source familiar with the situation. With 306 million shares outstanding on a fully diluted basis, Klaviyo will be valued at approximately $9.2 billion.
Growing Expectations
On Monday, Klaviyo increased the expected price range for the offer to between $27 and $29 a share, up from the previous estimate of $25 to $27. The company is set to list on the New York Stock Exchange under the ticker symbol KVYO, with trading scheduled to commence on Wednesday.
Tech IPO Trend
Klaviyo’s IPO follows a recent surge in tech offerings after a long period of dormancy. Arm Holdings, a UK-based chip design house, went public last week at $51 a share and experienced an initial rally of 25%, although the gains were short-lived. Instacart parent company Maplebear also made its public debut, opening at $42 and closing its first day at $33.70.
Klaviyo’s Unique Offering
Founded in 2012, Klaviyo specializes in helping companies execute digital marketing campaigns through various channels such as email, text messages, and notifications. The firm competes with industry giants like Adobe, Salesforce, and Intuit’s MailChimp unit.
IPO Details
The offering consists of 19.2 million shares, including 11.5 million from selling shareholders. Notably, venture firm Summit Partners will retain a 21% voting interest even after selling five million shares through the IPO.
Klaviyo: A Promising IPO Prospect
Klaviyo, the e-commerce software firm, is set to make waves in the market with its upcoming initial public offering (IPO). With two classes of stock—A shares and B shares—Klaviyo has a unique structure that gives more power to its Class B shareholders. Unlike Class A shares, which have only one vote each, Class B shares receive 10 votes each. Interestingly, insiders control the Class B shares, constituting over 99% of the company’s voting interest.
One notable participant in Klaviyo’s IPO is Shopify, the renowned e-commerce platform. After the offering, Shopify will hold an 11.5% voting interest in Klaviyo—an investment worth approximately $1 billion at the IPO price. This represents just over 1% of Shopify’s overall market value. Additionally, CEO and co-founder Andrew Bialecki is expected to retain 39% of voting control after the offering.
Klaviyo owes much of its success to its strong partnership with Shopify. Research indicates that over 80% of Klaviyo’s annualized revenue is generated through Shopify customers. This mutually beneficial collaboration has greatly contributed to Klaviyo’s growth trajectory.
Financially, Klaviyo has demonstrated impressive performance. In the first half of this year alone, the company reported revenue of $246.6 million—a significant increase of 64% compared to the same period last year. For the entirety of 2022, its revenue reached $344.7 million—an impressive 67% growth from 2021. Notably, Klaviyo turned profitable this year, with a net income of $15.2 million during the first six months. Moreover, its trailing twelve months’ revenue through the latest quarter reached $585.1 million—an outstanding growth rate of 56.5%.
To strengthen its IPO, Klaviyo has secured commitments from prominent investors. BlackRock and AllianceBernstein have agreed to purchase up to $100 million worth of stock at the IPO price. This serves as a testament to the confidence major investors have in Klaviyo’s potential.
The underwriting group for this landmark IPO consists of prestigious financial institutions, including Goldman Sachs, Morgan Stanley, and Citigroup. Their involvement further validates Klaviyo’s status as an attractive investment opportunity.
As Klaviyo prepares for its IPO, all eyes are on this rising star in the e-commerce industry. With a successful track record, a strategic partnership with Shopify, and an unwavering commitment to innovation, Klaviyo is undoubtedly a company worth watching.