Shopify-Backed Klaviyo Falls From Opening Jump to Close Up 9.2% in Third Big US IPO in a Week

Marketing and data automation provider Klaviyo Inc. climbed 9.2% in its trading debut after topping its goal to raise $576 million in an initial public offering that could set the pace for listings by other startups.

(Bloomberg) — Marketing and data automation provider Klaviyo Inc. climbed 9.2% in its trading debut after topping its goal to raise $576 million in an initial public offering that could set the pace for listings by other startups.  

The IPO is the third major US listing in the past week, following grocery delivery company Instacart and Arm Holdings Plc, the semiconductor designer owned by SoftBank Group Corp., whose $5.23 billion IPO is the year’s biggest. Opening day gains by all three show investors are willing to put money into newly public companies after a nearly two-year dearth of offerings on US exchanges.

While the company is less well known than Arm or Instacart, the email software marketer, which sells to other businesses, is a more “bread and butter” technology IPO. Other private companies serving enterprises will be watching Klaviyo’s stock performance closely to see if they should also test the public waters. 

Klaviyo’s shares opened trading Wednesday at $36.75 after selling for $30 each in the IPO. After initially rising as much as 32%, the stock closed trading in New York at $32.76, giving the Boston-based company a market value of about $8.3 billion. Including stock options and restricted share units, the company’s fully diluted value is $9.9 billion.

The company and selling stockholders had marketed 19.2 million shares for $27 to $29, a range that was elevated before the share sale.

Paring Gains

Whether Klaviyo can sustain its opening-day boost is being closely followed by investors and other companies considering IPOs. German footwear maker Birkenstock Holding Ltd. and Vietnam-based internet platform VNG Ltd. are also preparing to list, while dozens of other startups have been waiting for equity markets to rebound.

Read More: Why Klaviyo is the Fall’s Big IPO Event for VCs

After closing its first day of trading up 25%, Arm is now trading only 3.7% above its IPO price. Instacart, incorporated as Maplebear Inc., gained 12% in its debut Tuesday but fell almost 11% Wednesday to within 10 cents of ts IPO price.

Including Klaviyo, 122 listings on US exchanges have raised $21.4 billion, according to data compiled by Bloomberg. That’s just short of the $21.7 billion raised by this point last year, though still less than a 10th of the $250 billion raised during the same period in a record-breaking 2021, the data show.

Like Arm and Instacart, Klaviyo signed up cornerstone investors. BlackRock Inc. and AllianceBernstein LP expressed interest in buying as much as $100 million of the IPO shares in aggregate, according to Klaviyo’s filings with the US Securities and Exchange Commission.

Klaviyo had net income of about $15 million on revenue of $321 million for the first six months of the year, compared with a loss of $25 million on revenue of $208 million for the same period last year, according to the filing.

Shopify, Accel

The company’s investors include growth equity firm Summit Partners, e-commerce platform Shopify Inc. and venture firms Accomplice and Accel. Summit is selling 4.9 million shares in the IPO, while Accomplice is selling almost 1.8 million.

Klaviyo’s largest shareholder will remain co-founder and Chief Executive Officer Andrew Bialecki, who will control 39% of the voting power, followed by Summit with 21%, according to the filings. Bialecki, 37, studied physics, astronomy and astrophysics at Harvard before starting the company in 2012. His stake in Klaviyo is now worth about $3.4 billion, according to the Bloomberg Billionaires Index.

Read More: Klaviyo IPO Mints $3.4 Billion Fortune for Harvard Physicist

“There’s lots of momentum for us right now — going public now is a great time to do it,” Bialecki said in an interview. “We don’t spend a lot of time worrying about what the day-to-day might look like and instead tend to take a long-term view.”

Klaviyo plans “a ton of expansion, including internationally,” Bialecki said. “One of the parts we’re especially excited about is our machine learning and artificial intelligence efforts.”

The offering was led by Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc. Other underwriters include Barclays Plc, Mizuho Financial Group Inc. and William Blair & Co. Klaviyo’s shares are trading on the New York Stock Exchange under the symbol KVYO.

–With assistance from Bailey Lipschultz and Diana Li.

(Updates with closing share price in fifth paragraph.)

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