Starting from a single customer to raising $150M Series B, how Klaviyo made this wonderful business journey?
Klaviyo – A big name in the e-mail marketing industry, raised a massive $150 million Series B in April 2019. After seeing the immense growth of the business in 7 years, the company decided to take it to the next level. Before this exclusive announcement the company had raised $8.5M. The journey of converting an innovative idea into a business platform started in 2012 in Boston.
We hear the phrase “success doesn’t come overnight”, it’s true indeed. You will be surprised to know that Andrew Bialecki - the CEO & Co-founder of Klaviyo wrote every single line of the code for the first five years of the business. The company started with one customer back in 2012. The Klaviyo community exploded since then in the past 8 years. Now Klaviyo is helping more than 10,000 businesses and brands build and grow their businesses. The company has more than 500 partners at present with 60+ integration.
How did Andrew get the idea to start Klaviyo?
The idea of the whole Klaviyo business was to scale the inter-communication relations of customers and businesses using technology. But any idea doesn’t come with planning; they just come, by any realization or because of some incident. The same is the story with Klaviyo. CEO Andrew went through some events that made him think that there is a lack of inter-communication skills between the customers and the companies. He realized that technology has become advanced but it can be much better. He also analyzed that something is missing but he didn’t know what it is? All he knew was, it can be made better and it is possible to achieve.
How Andrew Bialecki & Ed Hallen started this inevitable entrepreneurial journey?
Andrew shared two of his experiences when he found out the thing that was missing. He said that he loved to run and a few years back he wanted to run in the Boston Marathon. Sadly he forgot to register on time. The time he realized it, it was very late and the registration was over. He was surprised that he didn’t even get a reminder email for the registration although he had run the previous year. He got disappointed that he had practiced a lot to get in and he missed it. He felt that he could have been notified by an email such as “Would you like to run again this year?”. But there was no way of keeping the data of all the past participants and send them e-mails manually. When he discussed this with the folks they presented that they want to do it, but don’t have enough time. At that time Andrew realized where the problem is?
On the other hand, there was a café where he and his wife like to sit and talk every Friday. Now the staff of that place used to notice very small things about them, like what they like, what’s their favorite drinks and where they like to sit? It created an interpersonal relationship of them with that place.
That’s how he got the solution too. He knew that businesses do not have enough time or technology to communicate with their customers. They do not have the technology to keep track of their past customers. And the solution to this problem is to create something that can make a business-customer relationship more personal.
He knew what the problem was; he knew what the solution was now. What he doesn’t know how to do it?
Andrew Bialecki and Ed Hallen – the co-founders of the company used to work together in a company. While working there they also found it very frustrating to write an e-mail to a customer who had purchased a suit two months before but did not buy the perfect matching shirt and tie. This was the time when this opportunity triggered in their mind clearly. They decided to create something that can send more customized e-mails to more than one customer quickly. Besides that they also decided to create a tool that would not send same e-mail to every single customer, they wanted to make it quite real and personal.
How this amazing business did grow over 7 years?
In 2012 Andrew and Ed Hallen started the company by presenting Klaviyo- an e-mail marketing tool in the market. Andrew and Ed Hallen used to work together in a company Adaptive Predictive Technologies (APT) before that. They use to make data-driven marketing solutions for the customers there. Andrew built this tool and Ed Hallen found the customers for them. They get succeeded to make a tool that can e-mail with the data analytics and customization solutions as well.
Klaviyo first becomes a profitable company and then it thought of accelerating the business because of the good market response and customer feedback. Andrew also shared that in the very first few years they did not have any idea of raising the money. But in these seven years the business grew with excellent customer base and response. They have touched the customer base of 20000 in 2019, which is huge. Its quick return on investment attracted the attention of the investors. In past7 years Klaviyo - an early-stage venture was funded by 6 investors. Astral Capital and Summit Partners are 2 lead investors out of them. On Aug 26, 2015 this startup raised $1,500,000 with Seed and other 3 investors. This is how the company got its first investors after 3 years of the startup. Klaviyo got its series A funding of $7,000,000 from Astral Capital on 18 August 2017, almost 5 years after the company was founded. Recently Klaviyo raised $150M series B on 8th April 2019 with an equity firm in Boston i.e Summit Partners.
Klaviyo’s funding history
What is the vision behind this successful idea?
Andrew says that he comes from a small business family. They might not have a very huge business but the one they had was very real and long-lasting. He wanted to create something like that. That’s how they created Klavio, an e-mail marketing platform. It was very unique and helpful for customizing e-mails, keeping the data, and some very advanced features for e-mail marketing. He tried to understand the need of the business and transformed it into a solution with the technology. This integration has been proved helpful and successful in creating personal relationships and communication with customers. Now any business can create and customize the e-mail campaign very quickly.
Where does Klaviyo stand today?
You can get the idea of the success of the business that every single employee is handling 3 customers at a time. Klaviyo has reached a customer base of more than 30000 at present. You can get the idea of their growth by knowing that the number of customers in 2016 was 1000 and 5000 in 2017. The profit of Klaviyo has been growing faster year after year. They decided to raise the money in 2015 when the profits were growing very fast.
Andrew’s main focus today is to help businesses of any size, whether it’s a start-up, entrepreneur, or an iconic brand.
The mission of this fastest-growing company:
The main focus of Andrew and the team is to drive more sales to e-commerce businesses. They are helping many brands in achieving this goal by this super-targeting and highly relevant e-mail marketing strategy. Klaviyio is not restricted up to e-mail marketing now; it has extended to Facebook and Instagram marketing as well. It is helping a lot of businesses to extract very helpful data from e-commerce platforms like Magento and Shopify. It has become an amazing tool to personalize, customize, and analyses e-mail marketing strategies.
Know the pricing Strategy of the highly targeted marketing too!
The founders of the company have set a very reasonable pricing policy for its customers. They do not make any annual contracts or charge any hidden fees. All the customer has to pay is for the e-mail contacts and the number of SMS your business need.
Fact about Kalevio that will surprise you!
During these past 8 years, a patient, idea, hard work, and business strategy Andrew and Hallen made it. There are some surprising facts that you should know about this entrepreneurship journey.
- The company started with only 2 people in 2012.
- Every single line of the code is written by the CEO & co-founder of the Klaviyo i.e Andrew Bialecki.
- Ed Hallen was the one who got the first customer for the company, who is also the co-founder of the company.
- Klaviyo has its customers in 80 countries all over the globe which is amazing for an early age startup. They are still growing though.
- They address their employees by “Klaviyos”.
** A piece of advice to the budding entrepreneurs from Andrew Bialecki: Always think long term, even if you are starting from scratch and, Be yourself, be human and don’t be generic **
“A brand isn’t just a name, it’s the personalities of all the people who work there” - Andrew Bialecki
So this is how from two partners to this huge network, how this company grew amazingly in the past 7 years and set an example in front of all the budding entrepreneurs. All you need is an idea, vision, and passion to achieve it.