Klaviyo, a customer data and marketing platform for online businesses, today announced it has raised $200 million in Series C funding, led by Accel with participation from existing investor Summit Partners. The new financing brings Klaviyo’s total funding to date to $358.5 million. The investment will help further fuel Klaviyo’s rapid growth through R&D, hiring, increased sales, customer support and international expansion. The company also announced it has added Accel’s Ping Li to its board.
As consumers’ purchases have increasingly shifted online during the COVID-19 pandemic, companies of all sizes have scrambled to optimize their digital presence. From brick and mortar retailers moving online for the first time, to existing e-commerce brands doubling down on efforts to deliver highly personalized communications and service, businesses need customer data to inform their marketing efforts. Klaviyo’s software is designed to easily integrate with leading e-commerce platforms like Shopify, Magento, BigCommerce, Stripe, and WooCommerce, applying AI and machine learning algorithms to pull in customer data to generate audience insights, and automate and customize relevant communications, advertising and marketing campaigns.
“Klaviyo helps online businesses of any size break out of the one-email-fits-all marketing mentality, because blanket communications aren’t effective for anyone,” said Klaviyo co-founder and CEO, Andrew Bialecki. “Every online customer has unique preferences that influence how and where they make purchases and we’re able to help sellers leverage their own customer data to create an experience they control — one that is ultimately measured in revenues generated, not pages viewed.”
Customer Data Belongs with Creators, Not Big Tech
According to the U.S. Department of Commerce, consumers spent nearly $348 billion online with U.S. retailers in the first half of 2020, an increase of 30.1% over the same period in 2019. The Klaviyo platform helps e-commerce merchants find, keep and connect with customers in a meaningful way. The company’s AI-enabled tools are easy to use and store information in data warehouses, eliminating the need for businesses to rent their own data back from Big Tech players. As a result, customer data is in direct control of the creators themselves to inform and curate highly customized communications.
The Klaviyo platform helps emphasize and measure revenue generated, not just web traffic, click-through and email open rates. In 2020, Klaviyo’s software has helped generate over $11 billion in sales for its customers, saving them an estimated hundreds of millions of dollars in online advertising costs. Klaviyo software also provides businesses with the necessary data to convert sales via their own sites rather than through outside marketplaces, which typically take 8-15% in fees for each sale.
“Klaviyo has given us one-of-a-kind insights and levers to boost revenue by double-digit percentages year after year. The team, tools, and service are top-tier and constantly improving. It feels like Klaviyo and Chubbies are growing hand-in-hand and that’s a better partnership than we could ever have asked for,” said Erich Hellstrom, Manager of Retention Marketing, Chubbies, a men’s shorts online retailer.
Klaviyo’s customer base has doubled over the past 12 months and the company today serves more than 50,000 customers ranging from small businesses to Fortune 500 companies, in more than 125 countries.
Capital-infused Growth and Expansion
Klaviyo, founded in 2012, was bootstrapped for three years before taking outside funding and is profitable. The company raised just $8.5M in outside investment before it closed a $150M Series B round last March led by Summit Partners. The new capital from Accel and Summit Partners will help accelerate growth and enable Klaviyo to remain focused on bolstering its best-in-class customer support and building out the platform’s AI and machine learning capabilities to engineer and design the future of guided software.
“The e-commerce boom spurred by the pandemic has driven the customer experience to exist primarily online, an environment where personalization is paramount,” said Ping Li, partner at Accel, who has joined the Klaviyo Board of Directors. “Klaviyo’s data-driven technology gives e-commerce brands an attractive alternative to going through intermediaries for ads or selling on other marketplaces. It’s an intelligent enablement tool, helping them to both keep and control a direct line to their customers resulting in better data, enhanced service, and increased sales.”
A Boston-based Technology Brand Serving a Global Audience
Headquartered in Boston, Klaviyo currently has 500 employees, with over 300 in Massachusetts. The company intends to double headcount to 1,000 by the end of 2021, with hiring predominantly for Boston-based engineering and design positions.
“The Klaviyo team blends product vision, technical talent and customer centricity – and we believe the company’s growth trajectory underscores the true power of this combination,” said Michael Medici, Klaviyo board member and Managing Director of Summit Partners. “Klaviyo continues to attract talented members to its growing team, and Summit’s second investment represents our continued confidence in this team and their mission: to change the playing field in commerce and offer brands of all sizes a release from the expensive confines of Big Tech control over ads and marketplace sales – and the chance to own their growth.”