The IPO market rally continues. Here's our take on Klaviyo.
Earlier this week, another notable IPO took place: marketing automation platform Klaviyo (ticker: KVYO) went public. The company received a market valuation of $8.2 billion, making it the fourth-largest IPO of the year — on par with Instacart, but smaller than ARM and Kenvue.
What does the company do?
Klaviyo helps clients deliver advertising more effectively to their target audience. The company collects and analyzes customer data for targeting (with over 6.9 billion profiles already created) and provides an online platform for automating marketing campaigns, including those using AI algorithms.
Klaviyo primarily serves online businesses, promoting them through channels such as email, SMS, push notifications, and others.
In the first half of 2023, the company’s revenue grew by 54%, and the number of customers reached 130,000. During the same period, Klaviyo also achieved an operating profit of $8 million, albeit modest.
The company’s “anchor” investor is Shopify, one of the largest e-commerce platforms, holding an 11% stake.
Why is this important?
The latest IPOs of companies with a similar profile took place in December 2021 — at the market peak. Now, we see American tech companies are once again "raising cash." Klaviyo’s IPO was oversubscribed by 30 times, and its shares have already risen 12% above the offering price (while Instacart’s shares increased by only 2.2%).
Of course, we will continue to monitor the IPO dynamics, but so far everything indicates that investors’ appetite for tech stocks is returning despite high interest rates and economic slowdown.