What they do. Klaviyo allows companies to bring their first-party data together and use it to create and deliver highly personalized consumer experiences across digital channels. “This enables business to to send the right message at the right time across email, SMS, and push notifications, more accurately measure and predict performance, and deploy the specific actions and campaigns that drive the highest impact.” They have 130,000 customers and have assembled 6.9bln consumer profiles at their customers. Personalized email is the core product.
Pricing is volume and product based. “Our subscription plans are tiered based on the number of active consumer profiles stored on our platform combined with the number of emails and SMS messages sent. As our customers’ businesses grow, they utilize more consumer profiles and send more emails and SMS messages, which naturally increases their usage of our platform. Our revenue also expands when our customers add additional channels, such as SMS, or when their other brands, business units, and geographies start using the platform.”
Customer retention is strong and improving. “Our NRR was 111%, 115%, 119%, 121%, 121%, 120%, 119%, 119%, 119%, and 119% as of March 31, 2021, June 30, 2021, September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023, and June 30, 2023, respectively.”
Nice growth, and just turned profitable. “We grew our revenue 62.7% year-over-year, from $290.6 million in 2021 to $472.7 million in 2022. Our net losses for 2021 and 2022 were $79.4 million and $49.2 million, respectively. In 2021 and 2022, our operating cash flow was $(22.7) million and $(23.6) million.” However, in the past 6 months Klaviyo turned a profit!
Moving from SMB to mid-market and enterprise. “As of June 30, 2023, we had 1,458 customers generating over $50,000 of ARR, representing growth of 94% year-over-year. Going forward, we expect to continue to grow our mid-market and enterprise presence as we further invest in our outbound sales team and add new product capabilities.”
Even successful companies like Klaviyo did cuts. They have 1548 employees today. But “in March 2023 we announced a reduction-in-force affecting approximately 8% of our global workforce.”
The business has not been efficient. Lifetime, they have generated only $0.19 of revenue for every dollar of investment, but they did recently turn profitable. The ultimate valuation here is going to be a downround, but that’s ok. Take your medicine and move on.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at sammy@blossomstreetventures.comhttps://blossomstreetventures.com/metrics/