5 Interesting Learnings from Klaviyo at Almost $1 Billion in ARR
"Cross-selling is working well for Klaviyo and key to maintaining growth."
So the latest SaaS leader to cross $1B ARR is Klaviyo. Klaviyo dominates marketing in the Shopify ecosystem and in ecommerce, and just keeps on scaling. It was the only SaaS IPO on 2023. The only one!
And at almost $1B ARR, it’s still growing a stunning 34% (!).
In the words of founder CEO Andrew Bialecki: “There’s no downturn at Klaviyo.”
5 Interesting Learnings:
#1. 110% NRR from 157,000 SMBs
Yes, it can be done, 110% NRR from SMBs. It’s down from 117% at its peak, however. Still pretty darn impressive from smaller customers.
#2. 54% Growth in $50k+ Customers
Like Shopify, Klaviyo is firmly SMB overall. But its bigger customers are key to fueling growth, as they are at Shopify, too. The biggest ones are growing 54%, vs. 35% for Klaviyo overall.
#3. Getting More and More Efficient, Now 14% Non-GAAP Margins.
Outside of a pre-IPO phase, Klaviyo has been cash-flow positive or close for most of its history. Today, it’s steadily driving its margins up, now up to 14% non-GAAP operating margins. But it’s clear that it’s still in the investing phase, and increasing spend in sales & marketing. Just not as quickly as overall revenue growth.
#4. Steadily Going More Global; EMEA Growth 45%, All International 41%
Klaviyo just added French, German and Italian functionality (you should probably do this earlier :). A third of revenue is from outside the Americas.
#5. Cavna Integration is Their Fastest Adopted Integration in History
Canva is a beast, and integrating them with Klaviyo’s scale in ecommerce just makes sense.
And a few other interesting learnings:
#6. New Customer Count Growing 16%
If you keep this as close to 20% as possible at scale, it’s the key to unlocking years of growth. With 110% NRR + 16% new customer growth, Klaviyo should be able to grow 20% or more a year for years to come.
#7. 80% of Top 50 Customers Using their SMS Product
Cross-selling is working well for Klaviyo and key to maintaining growth.
#8. Adding Cash Bonuses for Performance, Reducing Equity Grants
Everyone is under pressure to reduce stock-based expense, so Kalviyo is rolling out more short-term cash bonuses to make up for reduced equity grants.
#9. New Startups and Companies and Enterprise Strong. SMB Weaker.
Klaviyo is seeing strengths in its entrepreneur segment (new companies) and enterprise ($50k+ deals) as noted above. But SMBs in the middle have become more cost and price-sensitive.
#10. Going More and More Multi-Product is the Key To $2 Billion in ARR
As it is for almost all of us. Some earlier, some later.
