- Digital marketing platform jumps 9% on debut after $30 pricing
- Third multi-billion new US listing in just over a week
- IPO revival facing early test after ARM, Instacart fail to hold gains
Talk of a revival in the IPO (initial public offering) market is facing its first real test. Overnight, Boston-based Klaviyo (KVYO:NYSE) listed shares on the New York Stock Exchange in another apparent victory for the optimists.
The provider of e-commerce marketing automation solutions raised $576 million of fresh growth funding after pricing its shares at $30, a touch above the $27 to $29 range (itself raised from $25 to $27 previously), but investors still rushed to buy shares on day one, sparking a debut stock pop of more than 9%.
The stock closed at $32.76, valuing the business at around $9.8 billion and minting a new billionaire in founder Andrew Bialecki, who started the company in 2012. He still owns about one third of Klaviyo, making him the company’s largest shareholder with a stake worth roughly $3.2 billion.
ARM & INSTACART FADE
September’s seeming IPO revival was kicked off by chip architecture firm ARM (ARM:NASDAQ) (14 Sep) and following by online grocery app Instacart (CART:NASDAQ) (20 Sep). Both popped on their market debuts, 25% and 12% respectively, but they have struggled to hold on to those gains.
Everything you need to know about ARM’s IPO and how to buy the shares
Instacart has subsequently lost all of its day one gains, falling back to $31.10, barely above the $30 IPO price. At $52.91, ARM trades less than 4% above its ‘priced-to-go’ float price of $51 following a four-day losing streak.
Of course, it’s very early days and investors should not draw long-term conclusions on (very) short-term share price moves, but it does suggest that what happens over the next few weeks and months will be illuminating, shedding light on the underlying appetite for high-growth IPOs.
Klaviyo reported $15 million of net income on $321 million of revenue for the first half of 2023. Other major shareholders include venture capital backers Summit Partners (21.3% pre-IPO stake), Accomplice (5.7%) and e-commerce platform Shopify (SHOP:NYSE), which owned an 11.2% pre-IPO stake.
