Klaviyo Soars in Market Debut, IPO Priced at Top Range

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Klaviyo, a Boston-based marketing software firm, made a strong debut on the New York Stock Exchange on Wednesday, with shares opening at $36.75, a 23% surge from its initial public offering price of $30. This comes after Klaviyo had already increased its expected price range for the offer from between $27 to $29 a share, up from an earlier estimate of $25 to $27. With a total of 306 million shares outstanding on a fully diluted basis, the company now boasts a market value of roughly $9.2 billion.

Founded in 2012, Klaviyo has established itself as a formidable player in the digital marketing industry, offering businesses the tools to build smarter digital relationships with their customers through targeted email, text messages, and other notifications. With a customer base exceeding 130,000, including industry giants like Unilever and Spanx, Klaviyo competes with the likes of Adobe, Salesforce, and Intuit’s MailChimp unit. As part of its growth strategy, the company has been diversifying into new vertical markets, most notably with the introduction of a new offering called Klaviyo for Wellness.

Klaviyo’s Successful Start on NYSE

Boston-based marketing software firm, Klaviyo, made a strong entrance on the New York Stock Exchange. Priced at $30 a share during its Initial Public Offering (IPO) on Tuesday, the stock opened for trading on Wednesday at $36.75, marking a 23% increase from the IPO price. With 306 million shares outstanding on a fully diluted basis, Klaviyo now boasts a market value of approximately $9.2 billion.

Increased IPO Expectations

On Monday, Klaviyo had raised its expected price range for the offer to between $27 to $29 a share, up from a previous estimate of $25 to $27. This new listing, under the ticker symbol KVYO, follows a series of tech IPOs, including UK-based chip design house Arm Holdings and Instacart parent Maplebear, both of which saw significant initial gains.

Competing in the Digital Marketing Space

Founded in 2012, Klaviyo aids businesses in their digital marketing efforts by using various means of communication such as email, text messages, and other notifications. Competing against giants like Adobe, Salesforce, and Intuit’s MailChimp unit, Klaviyo has managed to draw in more than 130,000 customers, including small businesses and larger corporations like Unilever and Spanx. Despite originally focusing primarily on e-commerce companies, Klaviyo has been expanding into new market sectors, with the launch of a new product called Klaviyo for Wellness.

IPO Breakdown

The IPO consisted of 19.2 million shares, 11.5 million of which were for selling shareholders. Summit Partners, a venture firm, sold five million shares but will maintain a 21% voting interest after the offering. Klaviyo offers two classes of stock, A shares and B shares, the latter of which provides ten votes each, compared to one vote for each A share. Insiders control Class B shares, accounting for more than 99% of the voting interest in the stock. Shopify will hold an 11.5% voting interest in the company post-IPO, with CEO and co-founder Andrew Bialecki retaining 39% voting control.

Financial Performance

Klaviyo has shown solid financial performance, with revenue for the six months ended June 30 reaching $246.6 million, up 64% from the same period a year earlier. The company’s full year 2022 revenue was $344.7 million, marking a 67% increase from 2021. Klaviyo also turned profitable this year, with a net income of $15.2 million for the first six months.

Key Takeaways

Klaviyo’s successful start on the NYSE illustrates the growing interest and potential in digital marketing platforms. The company’s diversified customer base, coupled with its expansion into new markets and strong financial performance, are promising indicators for future growth. However, as Klaviyo competes in a highly competitive market, it will be interesting to see how it continues to innovate and differentiate its offerings to maintain and increase its market share.

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