When the stock market cooled last year, it led to a shortage of startup IPOs. That could well change. The Wall Street Journal reports That Klaviyothe Boston-based marketing automation startup that has raised more than $775 million will pull the trigger later this year.
If it’s true that the company hired bankers to prepare an IPO, as the article says, Klayvio could help end a long drought of tech startup IPOs. If the debut goes well, it could help open the gates for other companies that are hesitant and don’t want to go public first in the current economic climate.
Klaviyo is as good a candidate as anyone else, a company that has raised a boatload of money. Its most recent fundraising was in May 2021 when it raised $320 million at an eye-popping valuation of $9.5 billion. Last August, it raised another $100 million from Shopify, per Crunch base.
But in the current economic climate, investors aren’t looking at growth at all costs as they do in 2021. Instead, they want operational discipline, which has led to layoffs at big companies like Alphabet, Meta, Microsoft, Amazon, and Salesforce, as tech companies have done. . tried to satisfy investors’ hunger for lower operating costs.
Klaviyo joined the trend when it laid off 140 employees last month, as australiabusinessblog.com reported. This could be part of an effort to streamline costs ahead of the potential IPO to make the company more attractive to jittery investors.
The Wall Street Journal reports that the company has hit nearly $600 million in annual recurring revenue (ARR), a popular way of measuring software company revenue. The Journal also reports that the company is profitable, although it’s not clear to us what that means; adjusted EBITDA and GAAP net income are different beasts.
There are other names in the mix when considering which company could break the IPO deadlock. Turo, a peer-to-peer car rental service, has kept its public offering documentation hot, as australiabusinessblog.com recently reported. Reddit, a collection of online communities, and Instacart, a grocery delivery service, are among the list of tech companies that could go public this year. Other candidates include big data company Databricks, which had a valuation of $38 billion last year, and Lime, a scooter unicorn.
The company did not respond to a request for comment on the report.