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According to a recent report, the global marketing technology (MarTech) market is expected to grow at 20% CAGR through 2030 from $325.7 billion in 2022. Recently listed Klaviyo (NYSE: KVYO) is making its mark in the industry.

Klaviyo’s Offerings

Boston-based Klaviyo was founded in 2012 by software engineers Bialecki and Ed Hallen to enable organizations to leverage their data to send out personalized marketing emails and messages to potential customers. Klaviyo’s solution helps organizations improve their revenue growth by leveraging first-party data to deliver improved consumer experiences across digital channels. Its SaaS solution integrates its proprietary data and application layers into a vertically-integrated solution with advanced ML and AI capabilities. The platform has seen rapid adoption and now boasts of over 130,000 customers across multiple industries.

Klaviyo offers a solution that has been purpose-built for consumer datasets, setting itself apart from other data warehouse and database solutions that primarily provide the ability to store and analyze significant volumes of data for general-purpose use cases. Traditional database solutions lack the front-end application layer that Klaviyo has built into its platform and high value data intelligence capabilities. Most mar-tech offerings use a flattened and narrowed view of a consumer’s historical data that limits the granularity of segmentation businesses can use. As of June this year, Klaviyo had analyzed over 6.9 billion consumer profiles across its customer base and processed over 695 billion events over the past 12 month period to understand how consumers engage across channels.

Klaviyo has also benefited from its partnership with Shopify. Through its partnership, Klaviyo has helped hundreds of Shopify’s merchants better understand their customers and engage them in highly personalized ways across several touchpoints. Shopify is also a significant investor in the company and had invested $100 million for a 11% stake. Klaviyo is available on Shopify’s app store and is also the preferred email solution provider for Shopify Plus. It also gets early access to upcoming Shopify development features, helping accelerate the development and adoption of technologies aimed at assisting merchants in adapting to recent changes in online marketing.

Klaviyo’s Financials

Klaviyo operates on a subscription-based revenue model. Its subscription plans are tiered based on the number of active consumer profiles stored on its platform combined with the number of emails and SMS messages sent.

For the six months ended June 2023, Klaviyo’s revenues grew 53.9% to $320.7 million and net income grew to $15.16 million from a loss of $24.56 million a year ago. Klaviyo ended fiscal 2022 with revenues of $472.7 million, up 47% from $290.6 million for 2021. Net loss in fiscal 2022 was $49.2 million compared to $79.4 million a year ago. 

Klaviyo estimates its addressable market at $16 billion. But the market is dotted with several vendors in the space. Besides competition from bigger players like Salesforce and Adobe, it also competes with other marketing focused service providers like HubSpot and MailChimp.

Till recently, Klaviyo was privately held and had raised $454.8 million in primary capital since inception from investors including Summit Partners, Shopify, and Accel. Its last round of private funding was held in 2021 when it was valued at $9.5 billion. Klaviyo had priced its IPO at $30 apiece targeting a valuation of $9 billion.

The stock climbed to $37.36 post listing, but has fallen since. It is currently trading at $33.02 with a market capitalization of $8.3 billion.

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