Klaviyo IPO: Marketing Firm Ups IPO Price Seeking $9Bn Valuation

Klaviyo announced plans to increase its IPO valuation to $9 billion after upping its IPO share price target to between $27 and $29 from between $25 and $27 earlier following the upbeat performance of Aarm’s IPO. The move comes after Instacart also raised its IPO pricing on Friday.

According to Reuters, the IPO is already over 20 times oversubscribed, and the Monday price increase is unlikely to dissuade investors from buying Klaviyo shares during its IPO. If the IPO is priced at the higher end of the range, the marketing automation company would raise $557 million during the IPO

Klaviyo has attracted some deep-pocketed cornerstone investors, such as BlackRock Inc. and AllianceBernstein LP, which have indicated an interest in buying up to $100 million worth of the company’s shares each. Given the value of the shares available during the IPO, we can predict that only a small portion will be left for retail investors. 

The $9 billion market valuation Kaviyo is seeking is plausible, given that it's similar to what Instacrt is seeking from the markets. The company plans to sell nearly 19.2 million shares, priced between $27 and $29 each. 

Klaviyo’s IPO comes after an almost 2-year drought with very few venture-backed tech IPOs and follows the Arm IPO and the pending Instacart IPO. It seems like there is a rebound in tech-based IPOs, which had stayed away from the markets due to the negative investor sentiment towards such IPOs. 

The IPOs of Klaviyo, Instacart and Arm could trigger a surge in the number of tech-related companies looking to IPO in the US stock exchanges, officially marking an end to the IPO orught that has plagued US markets for the past two years. 

Shopify, an e-commerce company, owns 11% of Klaviyo shares, as disclosed by the marketing firm, but it is unclear whether it shall be looking to dispose of the stake during the IPO. Additionally, about three-quarters of Klaviyo’s annualized recurring revenue is derived from customers who use Shopify as of the end of 2022.

Founded in 2012 by software engineers Ed Hallen and Andrew Bialecki, Klaviyo helps store and analyze data for e-commerce brands, allowing them to send personalized marketing emails and messages to potential clients.