Ecommerce marketing automation platform Klaviyo has received a $100 million strategic investment from Shopify, according to documents filed with the U.S. Securities and Exchange Commission. The disclosure this morning coincided with the announcement that Klaviyo and Shopify will strengthen their existing partnership by making Klaviyo the recommended email product for Shopify’s premium merchant plan, Shopify Plus and granting Klaviyo early access to Shopify development features.
“We’ve been working closely with Shopify for years and this is a great next step,” Klaviyo CEO Andrew Bialecki told TC via email. “I’ve talked with their product team and CEO many times — they’re big believers in our mission of empowering creators and they have a lot of respect for the products we’ve built and our customer first, product led culture. Shopify’s been key to our growth and a great team to work with and we’re excited that this will help us go faster in helping more of their customers.”
Founded in 2012, Boston-based Klaviyo — which TC has profiled extensively — integrates with existing platforms (e.g., Octane AI, Recharge) to automate the sending of emails and text messages to companies’ customers. Using Klaviyo, businesses can set up triggers for messages about things like abandoned carts and product recommendations, leveraging templates and predictive analytics tools to abstract away the processes.
Certainly, there’s no shortage of competition in the marketing automation tech space (see Sendlane, Sendinblue, and Cordial to name a few). But Klaviyo has done well for itself, reaching over 100,000 paying customers including Unilever, Dermalogica, Solo Stove and Citizen Watches currently pay for its service.
To date, Klaviyo, which has over 1,000 employees, has raised around $775 million. As of May 2021, the startup was valued at $9.5 billion by investors including Sands Capital, Counterpoint Global, Accel, and Summit Partners.
For Shopify, Klaviyo is the latest in a string of investments and acquisitions aimed at broadening the ecommerce platform’s reach. In May, Shopify snapped up shipping logistics startup Deliverr for $2.1 billion — the largest purchase in Shopify’s history — to launch an “end-to-end” logistics platform for merchants. Just this week, Shopify invested in Single, a music and video app used by many businesses on Shopify, following an investment in content management system developer Sanity.
To the extent that they have a focus, Shopify’s past year of investments lean in the direction of product recommendations and marketing. Last September, Shopify put money toward and entered into a partnership with Yotpo, which provides marketing tools and products for consumer sellers. Shopify more recently injected capital into Crossing Minds, a startup offering a platform that delivers “personalized experiences” ostensibly without using personal customer data.
Certainly, there’s pressure on Shopify to better weather what’s likely to be an extended economic downturn. Last month, the company laid off 10% of its workforce — about 1,000 employees — in what CEO and founder Tobi Lütke described as a “necessary” move in response to users pulling back on online orders and returning to old shopping habits. The company posted a $1.2 billion net loss for Q2 2022, and warned shareholders during a call last week to expect inflation to impact earnings throughout the remainder of the year.