Klaviyo, Inc. (Klaviyo) is a technology company that provides a software-as-a-service (SaaS) platform to enable its customers to send the right messages at the right time across email, short message service (SMS) and push notifications, more accurately measure and predict performance, and deploy specific actions and campaigns.
The company’s reviews add-on allows for the collection of product reviews within its platform and its Customer Data Platform (‘CDP’) offering gives user-friendly ways to...
Klaviyo, Inc.
(Klaviyo) is a technology company that provides a software-as-a-service (SaaS) platform to enable its customers to send the right messages at the right time across email, short message service (SMS) and push notifications, more accurately measure and predict performance, and deploy specific actions and campaigns.
The company’s reviews add-on allows for the collection of product reviews within its platform and its
Customer Data Platform
(‘CDP’) offering gives user-friendly ways to track, transform, and cleanse data, as well as run more advanced reporting and predictive analysis to drive revenue growth. The platform combines proprietary data and application layers into one solution with machine learning and artificial intelligence capabilities. The company focused on marketing automation within eCommerce as its first application use case.
The company generates revenue through the sale of subscriptions to its customers for the use of its platform. Subscription plans are tiered based on the number of consumer profiles stored on the company’s platform and the number of emails and SMS messages sent. The company has several wholly-owned subsidiaries in the United States and international jurisdictions.
The company provides businesses of all sizes with technology that captures, stores, analyzes, and predictively uses their own data to drive measurable, high-value outcomes. Klaviyo enables businesses to drive revenue growth by making it easy to bring their first-party data together and use it to create and deliver highly personalized consumer experiences across digital channels.
The company’s modern and intuitive software-as-a-service (SaaS) platform combines its proprietary data and application layers into one vertically integrated solution with advanced machine learning and artificial intelligence capabilities. This enables business users of any skill level to harness their data in order to send the right message at the right time across email, short message service (SMS), and push notifications, more accurately measure and predict performance, and deploy the specific actions and campaigns that drive the highest impact. The company focused on marketing automation within retail and eCommerce as its first application use case, and its software is highly extensible across a broad range of functions and verticals. Today, the company's customers primarily operate within the retail and eCommerce vertical, and it is also seeing organic growth from customers in other verticals, such as education, events and entertainment, restaurants, and travel, as well as from business-to-business (B2B) companies. By combining easy implementation, rapid time-to-value, and clearly attributable outcomes, the company drives substantial ROI for its customers. As of December 31, 2024, the company's platform had efficiently scaled to over 167,000 customers.
By vertically integrating its data layer and marketing application, the company makes it easy for businesses to create and store unified consumer profiles and then use those profiles to derive new insights, rapidly segment their consumers, and ultimately drive revenue generation. The company purpose-builds a centralized, scalable, and flexible cloud-native data store for its customers to intelligently aggregate and process first-party consumer profile and event data without friction. This approach enables the company's customers to seamlessly generate unified and highly granular consumer profiles, populated with data from customers’ systems and from over 350 third-party integrations, from eCommerce platforms, such as Shopify, WooCommerce, and Salesforce Commerce Cloud, to loyalty, customer service, and shipping solutions. The company built an application layer on top of its data layer to provide a comprehensive set of tools and features that enable its customers to easily turn consumer preferences into insights and actions.
The company generates revenue through the sale of subscriptions to its customers for the use of its platform. The company's subscription plans are tiered based on the number of active consumer profiles stored on its platform and the number of emails and SMS messages sent. The company permits its customers to send unlimited push notifications, which are included as part of its email subscription plan. Active consumer profiles are identified profiles that can be reached via at least one enabled marketing channel in Klaviyo; this means the profile is not suppressed, either by revoking consent or being rendered undeliverable. The vast majority of the company's subscription plans today are monthly.
The company's land-and-expand strategy aligns its own success with that of its customers. As its customers’ businesses grow, they utilize more active consumer profiles and send more emails and SMS messages, which naturally increases their usage of the company's platform. The company's revenue also expands when its customers add additional channels, such as SMS, and additional use cases, such as reviews and its CDP offering, or when their other brands, business units, and geographies start using the company's platform.
The company's go-to-market strategy is primarily product-led, and it attracts the majority of its new customers through inbound channels, such as word-of-mouth, agency partnerships, and platform integrations. The company has built a large and growing ecosystem of major eCommerce platforms, agency partnerships, and developers, which helps it efficiently attract new customers. Once customers access the Klaviyo platform, they can easily integrate with more than 350 third-party data sources to import and explore their first-party data and design and run campaigns and automations, providing rapid time-to-value.
When the company first launched its platform, it intentionally focused on serving entrepreneurs and small and medium-sized businesses (SMBs). As its customers have scaled and become mid-market companies and larger enterprises themselves, their success with Klaviyo has attracted more interest from similarly sized businesses that are looking to drive better engagement with their consumers. As such, the company has continued to build out a sales team to focus on mid-market and enterprise customers.
The company builds Klaviyo because businesses need powerful technology to capture, store, analyze, and predictively use data to drive measurable, high-value outcomes. The company’s vertically integrated, highly-scalable, and flexible platform unifies the data and application layers with its messaging infrastructure into one modern tech stack.
Data Layer:
The company’s highly-scalable platform is optimized for large volumes of data, delivers sub-second-level accessibility, and provides extremely high levels of personalization and attribution. The company builds its data store from the ground up to be agile, unbound by specific schema or data structures. The company’s data store synchronizes unaggregated, historical profile data with real-time event data in a single system-of-record. Profile data enables its customers to generate unified consumer profiles with extremely granular segmentation, grouping consumer profiles into precise audiences that update in real-time as consumers interact with its customers.
Application Layer:
The company builds an application layer on top of its data layer, which provides a comprehensive set of tools and features that enable its customers to easily turn consumer learnings into insights and actions to drive revenue growth without the need to hire sophisticated and expensive in-house engineers. The company started with its marketing application, enabling its customers to create and manage targeted marketing campaigns and flows, track customer behavior, and analyze campaign performance to grow revenue. The company’s advanced data science and predictive analytics capabilities also utilize artificial intelligence and machine learning so businesses can estimate consumer lifetime value, predict a consumer’s next order date, and calculate potential churn risk. As a result, its application helps companies deliver contextually-relevant and personalized experiences throughout the entire consumer journey and across digital channels, such as email, SMS, and push notifications, through its messaging infrastructure. The company focuses on marketing automation for business-to-consumer (B2C) companies within retail and eCommerce as its first application.
Because the company vertically integrated its data layer, application layer, and messaging infrastructure into one technology stack, its platform provides customers the complete set of technologies needed to design and deliver highly personalized consumer experiences across multiple digital channels.
The company intends to leverage its differentiated approach to capitalize on its large market opportunity and leading market position to fuel future growth. The key elements of the company’s strategy are to attract new customers; expand sales within its existing customer base; grow its mid-market and enterprise presence; expand internationally; invest in its platform; and expand into new verticals and use cases.
The company’s vertically-integrated, highly-scalable and flexible platform unifies the data and application layers with its messaging infrastructure into one modern tech stack, providing all the features and automation tools necessary to drive personalized consumer engagement:
Email:
The core capability of the company’s platform is to enable businesses to send personalized emails to their consumers. This includes a range of drag-and-drop email templates, allowing customers to easily edit and customize pre-built templates; email campaigns and automations, including Smart Send Time features, generative AI for email content and subject line creation, and A/B testing tools; and advanced consumer list segmentation, all of which are tools to help create high-performing email engagements.
SMS:
The company’s SMS marketing capability enables customers to send targeted text messages to their consumers and strengthen relationships through its conversational SMS feature, which allows businesses to send personalized responses to consumers in real-time. The company also offers built-in contact cards to ensure that texts from its customers do not appear as random numbers. The company’s consent management and compliance tools save time and money for its customers and enable them to focus on delivering a highly personalized consumer experience. The company’s AI-powered SMS assistant uses generative AI to create message content and generate suggested responses for incoming text messages.
Push:
The company’s push notification channel allows customers to send personalized push notifications on iOS and Android devices to engage consumers with timely and relevant mobile app notifications to build omnichannel experiences.
The company’s multi-channel approach allows its customers to communicate with their consumers in the manner that best serves their diverse business needs. By creating a single, holistic view of the consumer, the company can help customers understand and communicate with their consumers across all channels. For example, some customers may choose to engage with consumers asynchronously through email with highly-segmented, personalized, and cost-effective messages. However, in some cases, such as notification of a flash sale, customers may choose to drive revenue through concise, action-oriented interactions delivered in real-time through SMS or push. Because the company’s platform was purpose-built to help customers understand their consumers, its customers can leverage consumer profiles, event data, and AI-powered predictive analytics to deliver highly personalized messages across relevant communication channels, rather than through disparate and disjointed channels.
Reviews:
The company's reviews add-on allows its customers to collect product reviews alongside their existing consumer data and messaging in Klaviyo, delivering a more seamless experience across the customer lifecycle. The company's AI tools suggest review headlines for consumers based on their review content and generate personalized review replies for its customers with the click of a button.
Customer Data Platform:
The company's CDP offering allows its customers to manage and deploy their data in Klaviyo more effectively. The company's CDP is built on the same infrastructure as Klaviyo’s marketing application and provides user-friendly tools to unify, enrich, and transform data, run more advanced reporting and predictive analysis, and sync data into and out of Klaviyo at scale. The company's CDP is built for businesses of all sizes and gives customers access to powerful predictive analysis functionality.
Integrations:
The company integrates with a wide range of data sources, such as retail and eCommerce platforms, including Shopify, Salesforce Commerce Cloud, and WooCommerce, to comprehensively replicate all historical profile and event data in Klaviyo and synchronize data going forward. These integrations allow the company’s customers to create a complete consumer source of record, bringing additional profile and event information into Klaviyo with minimal engineering effort.
Segmentation:
The company’s advanced audience segmentation allows businesses to create consumer segmentation based on all the consumer data they have available in Klaviyo, including purchase history, engagement levels, and Klaviyo-powered predicted customer lifetime value. The segmentation feature enables the company’s customers to better target consumers with personalized engagement. Via Klaviyo’s outbound integrations, segments can be automatically pushed to ad networks to further target consumers or accessed via API to power actions in other systems.
Automation — Campaigns and Flows:
Using its platform, businesses can build marketing campaigns which deliver regular interactions to their consumers about new launches, sales announcements, newsletters, and more. With Klaviyo, customers can drive more revenue by building data-powered omnichannel campaigns that engage their consumers across every touchpoint. The company offers pre-built templates for customers to choose from, and its platform has built-in generative artificial intelligence capabilities to allow users to auto-generate email and SMS content and build automations using natural language inputs. The company's platform also enables businesses to build flows, which are a sequence of automated actions, including messages, that are triggered when a consumer performs a specific action, such as joining a list, being added to a segment, making a purchase, or abandoning their cart. The company also offers customers the ability to use its Flows AI functionality to use natural language to build and manage their flows. The company’s built-in attribution allows customers to quantify and understand the revenue impact of campaigns and flows.
Analytics and Benchmarks:
The company's predictive analytics features use artificial intelligence and machine learning to drive valuable consumer insights related to consumer lifetime value, churn risk, and behavior forecasting. The company's benchmark feature aggregates anonymized performance data across its customer engagement strategies and allows businesses to compare their performance to that of their industry peers. Business metric comparisons, such as open rate, average cart value, and subscriber rate, allow businesses to evaluate the effectiveness of their engagement strategy and identify key areas of opportunity.
The Klaviyo platform was engineered from the ground up to be cloud-native, consisting of a set of reusable primitives — for example, the data store, segmentation engine, campaigns and flows, and messaging infrastructure — that provide tight vertical integration but are independent and extensible. The company’s entire data platform was designed to power many applications, with marketing as the first one.
The company’s data layer is the core of the Klaviyo platform and the foundation on which it builds all its functionality. The company builds a composite data store that aggregates effectively unlimited amounts of data in a way suitable for transactional, analytical, and machine learning workloads. The extensible architecture of the company’s data store runs an ingestion pipeline responsible for deduping, data augmentation, and identity resolution. This pipeline spawns multiple projections in real-time as billions of facts and actions are ingested, enabling the company to store the processed data in multiple formats. The extensibility of the projection mechanism allows it to easily add more use cases as needed.
The overarching architectural decision to use independent reusable primitives across the data layer, application layer, and messaging infrastructure was key to providing the level of scalability, reliability, and performance that the company’s platform offers.
Efficient Computation and Storage:
The company’s vertically-integrated platform is built for massive scale using cloud computing. In order to enable its customers to create dynamic, personalized experiences for their end users, the company efficiently ingested and stored billions of events every day on average during 2024. The company uses this data to power personalization and send billions of messages across multiple channels each month, including email, SMS, and push notifications.
Optimized for Large Data Sets:
The company’s data store is optimized for very large data sets with the capacity to combine and store its customers’ entire consumer history of profile and event data in real time without expiration of the ingested data. Architectural techniques, such as data partitioning and indexing across natural query seams allow its platform to scale with its customers.
The company stores all Klaviyo data in the cloud and use fundamental building blocks of that platform, such as elastic compute cloud instances, elastic load balancers, and block storage.
The company’s systems are designed to be redundant and most of the intra-system communication is done asynchronously, which allows it to achieve a high degree of reliability. The company builds redundancy in every level of the stack. For example, every sub-system runs on multiple data centers, reducing the dependency on a specific data center. Additionally, the company has built extensive monitoring to detect and recover from incidents and alert for potential anomalies.
In addition to reliability, the company builds its platform with message deliverability as a top concern. The company’s customers demand tools that help them maintain a trusted reputation with their consumers and channel providers, which it accomplishes by delivering personalized experiences on time and in accordance with applicable laws, regulations, and best practices. To further ensure trust in delivery, the company also provides features like guided warming, shared and dedicated sending internet protocol addresses, and a tight feedback loop with channel providers.
Fast Access to Data:
The company’s composite data store is engineered for scale and speed without requiring workarounds and limitations. The company’s strong data store performance is based on its projection architecture and the selection of multiple backing databases, including technologies, such as MySQL, PostgreSQL, Clickhouse, and S3. This allows the company fast access to range and point queries, complex segmentation, and aggregations, such as the amount spent by a consumer over the last 30 days.
The company has intentionally separated its application layer from its data stores through the implementation of rich front-ends, including HTML, JavaScript, and CSS that use techniques like backend-for-frontend APIs and leverage content delivery networks to reduce latency in accessing data.
The company’s research and development costs were $238.5 million for the year ended December 31, 2024.
The company’s partner ecosystem enriches its customer offerings and helps it reach a broader audience than it would be able to reach on its own. The company’s partner ecosystem includes commerce platforms, other technology companies, marketing agencies, systems integrators, and developers. Each constituent of its ecosystem contributes to the growth of its business increasing its collective reach, the depth of its integration portfolio, and the breadth of its customers’ first-party consumer data.
Through its partnerships and data integrations with commerce platforms, the company is able to aggregate and analyze its customers’ first-party consumer data in real-time to drive more and better insights for its customers. The company’s platform completes the technology stack for direct-to-consumer businesses, combining their commerce engines with its powerful solution to drive revenue growth through data-driven, highly personalized experiences. In July 2022, the company completed a series of transactions to memorialize its strategic partnership with Shopify, which established Klaviyo as the recommended email solution for all Shopify Plus merchants. The company also partners with most other major commerce platforms, including BigCommerce, Centra, Magento, Nuvemshop, PrestaShop, Magento (Adobe), Salesforce Commerce Cloud, Square, Wix, and WooCommerce. The company has additionally integrated with Amazon Buy with Prime. The company’s platform integrations create value for customers across a variety of verticals beyond retail and eCommerce. For example, the company integrates with Olo and Toast in the restaurant industry, Mindbody in the fitness and wellness industry, and Eventbrite in the events industry.
Other Technology Partnerships
The company enhances its platform through a large technology partner ecosystem and a robust library of integrations with other technology platforms, including Google, Meta, Zendesk, Gorgias, LoyaltyLion, Pinterest, and Canva. It has built a robust suite of over 350 pre-built integrations and native data sources that customers want connected to their Klaviyo hub. Customers can leverage the company's fast, easy-to-use integrations to synchronize real-time data from technology companies specializing in payments, credit cards, order management, support tickets, subscriptions, shipping, surveys, referrals, and reviews, among others. Through these integrations, the company has been able to build comprehensive consumer profiles on behalf of its customers that include information on consumer spend and details on non-financial activities, such as interactions with customer service, website activity, loyalty, social media, and more.
Marketing Agencies and Systems Integrators
The company has built a deeply invested community of digital marketing agencies, systems integrators, freelancers, and other consulting partners who recommend their clients use Klaviyo to design, run
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