After an 18 month dry spell, the tech IPO market may start show signs of life later in 2023 thanks to one Boston company.
Marketing software firm Klaviyo Inc. plans to list its shares publicly later this year, according to a report from the Wall Street Journal citing "people familiar with the matter." The publication reported that Klaviyo has tapped Goldman Sachs Group Inc. to be lead underwriter for the listing, which could happen as early as September.
A spokesperson for Klaviyo did not immediately respond to a request for comment.
Klaviyo was founded in 2012 and bootstrapped its growth for three years before becoming profitable in 2015. The Boston company’s software uses AI and machine-learning algorithms to generate audience insights from customer data, automating and customizing marketing campaigns for online businesses.
More recently, Klaviyo became a “unicorn” in 2020 after raising a $200 million round led by Accel that pushed its valuation past the $1 billion threshold. At the time of this fundraise, CEO Andrew Bialecki said the company might pursue an IPO in the next couple of years.
"I'm excited for us to be a public company, at some point, partially to prove that Boston can build really big, really successful public software companies and technology companies," he told the Business Journal in August 2022.
In the meantime, last year Klaviyo announced a new product partnership with Shopify Inc. and a $100 million investment from the Canadian company to grow its engineering and product base. Bialecki made it clear that this partnership was not a stepping stone to an acquisition of Klaviyo by Shopify.
If Klaviyo does go through with an IPO this year, it would follow more than a year of a dismal economic environment. At least 30 Massachusetts tech companies reduced the size of their teams in the first quarter of 2023, including Klaviyo. The company laid off 140 people in March.
Boston venture capitalists who focus on the tech sector are also expecting a slowdown of later-stage deals to last through the end of this year. And, there was also the recent collapse of Silicon Valley Bank, which served many startups and tech companies in Massachusetts.
Last year, poor economic conditions, high inflation and geopolitical tensions kept companies away from the public market. Only eight Massachusetts biotech companies held IPOs in 2022. Zero tech companies took the plunge last year. The last tech company in Massachusetts to hold an initial public offering was in September 2021.
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