Klaviyo shares jump 20% in third new tech listing this month

Receive free IPOs updates

We’ll send you a myFT Daily Digest email rounding up the latest IPOs news every morning.

Boston-based software group Klaviyo has become the third tech company in a week to surge on its public-market debut, jumping by more than 20 per cent in early trades on Wednesday, even as its predecessors Arm and Instacart have stumbled in the days after their listings.

The early success of the first big initial public offerings for nearly two years has enthused Silicon Valley investors, who have been waiting to list shares in a large number of privately held tech start-ups.

However, shares in Arm and Instacart have since shed a fifth of their value from their first-day highs, leaving both marginally ahead of their listing price.

Shares in Klaviyo jumped 22 per cent to $36.75 at the open on the company’s first day of trading after its IPO. The marketing software company had priced its shares at $30 on Tuesday, above the previously guided range.

Klaviyo sold 19.2mn shares in the IPO, raising $576mn. The IPO valued the company at $7.6bn, or $9.2bn on a fully diluted basis.

On the first day of trading, the company hit a market capitalisation of $9.2bn, or $11.1bn on a fully diluted basis.

The day-one rise follows similar pops for grocery delivery company Instacart and chipmaker Arm.

UK-based Arm rose 25 per cent on its first day of trading on Nasdaq last week and Instacart was initially up 40 per cent when the grocery app first opened on Tuesday morning.

However, Instacart’s stock lost momentum through its first day of trading, trimming its gains to close up 12 per cent. Its shares fell around 5 per cent on Wednesday morning. Arm was heading for its fourth consecutive day of declines on Wednesday as its shares traded 3 per cent lower.

After an 18-month period in which public listings had all but collapsed, a safe passage to public markets for both companies is an important signal for private companies and their investors. 

September’s third successful IPO could open the gate for a procession of start-ups that had shelved plans to go public owing to the downturn, according to venture capital investors in those companies. 

“Going out right now was great timing for the business,” said Amanda Whalen, Klaviyo’s chief financial officer. “We’ve demonstrated strong growth . . . and have a long runway ahead of us.”

BlackRock and AllianceBernstein have each committed to invest up to $100mn in the IPO, lending support to the offering.

“We’ve always been focused on having really strong unit economics . . . so one of the great things is that [recent investor focus on profitability] was not a massive pivot,” said Whalen. “We appreciate that that is appreciated right now.”

Klaviyo was founded in 2012, the same year as Instacart, and had been regarded as an IPO candidate before the market turned in 2021. The company, co-founded by Andrew Bialecki and Ed Hallen, provides marketing software to retailers, gyms and large enterprises, managing their data and helping them build bespoke campaigns for customers. 

Instacart is now trading at around a quarter of its peak private valuation of $39bn, achieved at the height of the pandemic in 2021. Klaviyo, meanwhile, is debuting at close to its peak valuation of $9.5bn in 2021.