Klaviyo’s Remarkable IPO

The tech IPO window has been fairly closed for the last 18 months.

Klaviyo has just shattered it in a remarkable way – the company was valued at $9.2B, or equivalent to a 15.7x ttm revenue multiple.

Klaviyo is a benchmark case of a tech-B2B business, which is Fabrica Ventures’ focus:

* It is a customer data platform company which ingests marketing data and empowers their customers to automate their marketing with data plus AI

* 77% gross margin

* High revenue growth: 56.5% for the 12 months ended June 30, 2023

* Product-led go-to-market strategy: “we attract the majority of our new customers through inbound channels, such as word-of-mouth, agency partnerships, and platform integrations”

* Shopify is a key partner and significant investor in the business. “Approximately 77.5% of our total ARR as of December 31, 2022 came from customers who also use the Shopify platform”

* Big customer basis: 130K+

* NDR (net dollar retention) = 1.21

* Profitability = 4.7%

* And, amazingly: “Efficiency is part of our DNA. We have raised $455M in primary capital since our inception, of which we have utilized only $15M in the operation of our business”

In summary: Klaviyo is a fast-growing, incredibly efficient, profitable software company.

Conclusion

Klaviyo shows that great companies can always go public.

Even though there are 100+ US-based blue-chip startups, we are expecting only a few tech IPOs in the coming quarters. Which is perfect timing for Fabrica Ventures Fund II, since we will continue to be able to buy Klaviyo-like startups at tempting (i.e., considerably lower) multiples in the secondary market.