E-commerce marketing automation platform Klaviyo has received a strategic $100 million investment from Shopify, according to documents filed with the U.S. Securities and Exchange Commission. The disclosure coincided with the announcement that Klaviyo and Shopify will strengthen their existing partnership by making Klaviyo the recommended email product for the Shopify premium merchant plan, Shopify Plus, while giving Klaviyo early access to Shopify features in development.
“We’ve worked closely with Shopify for years and this is a great next step,” Klaviyo CEO Andrew Bialecki told TechCrunch via email. “I’ve spoken with the product team and CEO a few times – they are huge believers in our mission to empower creators and have a lot of respect for the products we’ve built and our customers first, product-driven culture. Shopify has been key to our growth and a great team to work with and we’re excited that this will help us accelerate Helping more of their clients.
Founded in 2012 and widely described by TechCrunch, Boston-based Klaviyo integrates with existing platforms (eg, Octane AI, Recharge) to automate sending emails and texts to customers. With Klaviyo, companies can set up message triggers about abandoned carts, product recommendations, and more, and take advantage of a suite of templates and predictive analytics tools.
There is no shortage of competition in the field of marketing automation technology (see Sendlane, Sendinblue, and Cordial to name a few). But Klaviyo has done incredibly well for himself, reaching over 100,000 paying customers including Unilever, Dermalogica, Solo Stove and Citizen Watches.
To date, Klaviyo, which has more than 1,000 employees, has raised about $775 million. As of May 2021, the startup has been valued at $9.5 billion by investors including Sands Capital, Counterpoint Global, Accel, and Summit Partners.
For Shopify, Klaviyo is the latest in a series of investments and acquisitions aimed at expanding the reach of the e-commerce platform. In May, Shopify picked up freight logistics startup Deliverr for $2.1 billion — the largest purchase in Shopify history — to launch a “one-stop” logistics platform for merchants. Just this week, Shopify invested in Single, the music and video app many businesses use on Shopify, after pledging stock in CMS developer Sanity.
To the extent they have a focus, past Shopify investments have gone in the direction of recommendations and martech. Last September, Shopify put money into and partnered with Yotpo, which provides marketing tools and products for consumer sellers. The e-commerce giant recently injected capital into Crossing Minds, a startup that offers a platform that offers “customized experiences” ostensibly without using personal data.
There is certainly pressure on Shopify to weather what is likely to be an extended economic slowdown. Last month, the company laid off 10% of its workforce – about 1,000 employees – in what CEO and founder Toby Lutke called a “necessary” move in response to users’ backtracking on online orders and a return to old shopping habits. The company posted a net loss of $1.2 billion for the second quarter of 2022, and warned shareholders during a call last week to expect inflation to affect earnings for the remainder of the year.