BlackRock and Alliance Bernstein to Invest in Klaviyo

Major asset manager including BlackRock and research and services firm Alliance Bernstein LP have evinced interest to be cornerstone investors in the marketing automation company Klaviyo’s planned Initial Public Offering (IPO) on New York Stock Exchange (NYSE) by end of this year and Klaviyo hopes to raise up to $518 million in the public listing, media reports said.

According to a filing with the US Securities and Exchange Commission (SEC) on Monday, the Boston-based Klaviyo is offering 11.5 million shares at a range between $25 and $27. The filing said that BlackRock and asset management and research services firm Alliance Bernstein LP have both indicated interest in buying an aggregate of up to $100 million worth of Klaviyo’s IPO shares. Citigroup, Goldman Sachs, and Morgan Stanley are the lead underwriters for the public listing.

A Bloomberg News calculation puts Klaviyo’s valuation after the IPO at a range between $7.7 billion and $8.3 billion, considering its fully diluted share count. Unfortunately, this is a reduction from the $9.15 billion pre-money valuation that formed the basis of its funding in 2021. At the time, the company raised $320 million in a Series D round led by Sands Capital.

Klaviyo’s Chairman and CEO is Andre Bialecki, who has a 38% stake in the company. The firm is a part of Shopify’s platform and has more than 130,000 customers globally as of June 30, 2023, the reports said.

For the quarter ended on the day, Klaviyo posted $164.6 million in revenue, representing a 51% increase from the same period in 2022. For the first half of 2023, Klaviyo’s net income was $15 million on a $321 million revenue. While the net income was lower than the $25 million reported for the same period last year, the total revenue was higher than 2022’s $208 million.

Klaviyo Joins InstaCart and Arm

Founded in 2012, Klaviyo is a marketing automation platform that offers analytics, SMS marketing, and email marketing to e-commerce businesses. The company helps these businesses to automate their marketing and effectively interact with their customers. According to an official publication, brands that use Klaviyo’s services for SMS, email, or both, attributed a total of $2.2 billion of their BFCM (Black Friday Cyber Monday) revenue to Klaviyo messages. The company added that messages delivered through Klaviyo hit 7.5 billion in 2021 and increased 41% to 10.7 billion in 2022.

The market now awaits IPOs from SoftBank’s chip designer Arm, and grocery delivery and pick-up service Instacart. The Arm IPO is expected this week as the company hopes to raise up to $4.87 billion. Arm plans to float 95.5 million American Depositary Shares (ADS) on the Nasdaq.

Interestingly, Arm is now considering raising its IPO price. The company had initially set its price range between $47 and $51. This put its potential valuation at up to $54.5 billion, lower than estimates of between $60 billion to $70 billion.

Now, following heavy investor demand, Arm is mulling an upward revision. The chipmaker is considering seeking a valuation higher than $54.5 billion at a higher price range.