Klaviyo set for IPO 🧨

Good morning! As Klaviyo gets ready to ring the IPO bell, we too are sounding the alarm for our latest edition of Shop Pulse. Let’s dive in:

• Klaviyo set for IPO 🧨

• Shopify Update Roundup 🤠

Klaviyo set for IPO 🧨

Klaviyo is set to get the SaaS IPO markets going again after the last big one in 2021.

There have been several e-commerce experts and VCs who have been analyzing their Form S-1, so let’s take a look at what they’ve discovered.

Numbers:

• $585M in total revenue for the 12 months ending on June 30, 2023 - corresponding to a 57% revenue growth.

• Netted a $15M profit on $321M in revenue in the first half of 2023.

• 119% net retention rate - which means existing customers are paying them more as they continue using the platform.

Metrics

• 1458 customers paying over $50k per year (94% increase year over year)

• 130,000 customers paying about $5000 per year

• Top 10 customers make up 1.4% of ARR

• Only 14% of customers are using SMS

Relation to Shopify

• Shopify invested $100M to own 11.2% of Klaviyo

• 77.5% of Klaviyo’s ARR comes from customers on Shopify, with the next largest contribution from WooCommerce at 10%.

• Shopify gets a 15% cut for revenues over $1M of all customers using Shopify in return for marketing services. This payment was $16.2M in 2022

Shopify dependence

• Shopify has a warrant position in Klaviyo, which means they have the right to buy more shares of Klaviyo when they want

• Perhaps Sean puts it best with his tweet

Credits to opinions & analysis from Jonathan Moore, Sean Frank & Matt Turck among others to help write this piece.

Shopify Update Roundup 🤠

It’s been relatively quiet for a few weeks after the launch of Editions, but looks like the Shopify team is picking up steam again with new updates.

1. Brands can add some razzle dazzle to their store admin by uploading a custom store icon with a static image or gif. Should help recognize stores a lot easier for all the multi-store brands especially.

   

2. Shopify Flow continues getting improvements with 2 new triggers:

   • Product variant back in stock - Triggered when a variant goes from 0 (or less) to more than 1

   • Product variant out of stock - Triggered when a variant goes from more than 1 to 0 (or less)

3. The AI assistant on help center announced at Editions is finally here. Should make it a lot easier to find what you’re looking for without going down the rabbit hole of hunting documentation.

   

    

4. Shopify is giving app developers yet another incentive to get Built for Shopify certified by adding a search filter to the app store specifically for Built for Shopify apps.

   

Pulse Check ⚡️

1. Shopify has been recognized as the leader of 2023 Gartner Magic Quadrant in Digital Commerce.

2. Markets Pro launches checkout support for a mix of digital and physical goods.

That's a wrap for this week! Join us over on Twitter to chat about all things e-commerce. It's like attending the coolest virtual shopping party – no long lines, pushy salespeople, or shopping cart collisions in sight (@theshoppulse)t