PreIPO INTELLI™ Weekly Insights | Series 47
Friday, September 1st 2023 | Volume 1 Series 47 | Klaviyo IPO Plans, Byju's Restructuring, and recent funding rounds
Hello! As we approach the week's end, the INTELLI™ team is excited to share some updates. This week we have news on Klaviyo preparing for an IPO after reporting a 51% increase in Q2 revenue to $164.6 million and H1 2023 net income of $15 million. Byju's, a prominent Indian edtech startup, is undergoing a significant restructuring, while recent funding rounds include Otto's $43 million Series B and AI21 Labs' $155 million Series C. Additionally, Amazon has acquired Fig, a startup focused on enhancing the command line terminal experience, potentially aiding Amazon's competitiveness in the generative AI space.
Klaviyo Expected to IPO this month
Boston-based Klaviyo, a data and marketing automation firm, has officially announced its plans for an initial public offering (IPO). This move follows a remarkable surge in both revenue growth and profitability in its most recent quarter, further solidifying the company's position in the competitive tech market.
Klaviyo's financials for the quarter ending June 30 reflect a remarkable 51% increase in revenue, with figures standing at an impressive $164.6 million, compared to the same period last year. Moreover, the company reported net income of $15 million for the first half of 2023, based on revenue of $321 million. This marks a significant turnaround from the previous year when Klaviyo reported a loss of $25 million on revenue of $208 million during the same time frame. The substantial growth in revenue and profitability reflects Klaviyo's commitment to innovation and its ability to cater to the evolving needs of its customer base.
Klaviyo's decision to go public has been in the pipeline for some time, with the company confidentially filing for its IPO back in May, as previously reported by Reuters. This IPO announcement aligns with the growing trend of tech companies, including SoftBank-backed chip designer Arm Holdings Ltd and grocery delivery service Instacart, seeking public listing. Klaviyo is anticipated to debut its shares on the New York Stock Exchange under the ticker symbol "KVYO" sometime in September. The timing of this move is strategic, as it coincides with a period when the market for new listings has been relatively subdued due to external factors like Russia's invasion of Ukraine and the rise in interest rates.
While Klaviyo's filing did not disclose specific details such as the size or timetable of the IPO, the company's aspiration to raise at least $750 million in the offering was reported by Reuters in May. Klaviyo's last funding round in 2021 was instrumental in laying the groundwork for this IPO, raising a substantial $320 million and giving the company a pre-money valuation of $9.15 billion. The backing of major investors, such as Canadian e-commerce giant Shopify and affiliates of investment firm Summit Partners, underscores the company's potential in the market.
Established in 2012, Klaviyo has developed a niche in helping e-commerce brands effectively manage and analyze data to personalize marketing emails and messages for potential customers. As of June 30, the company boasted an impressive customer base of over 130,000 clients. Leading financial institutions, including Goldman Sachs, Morgan Stanley, and Citigroup, have been named as the lead underwriters for Klaviyo's upcoming IPO, signifying the substantial interest and confidence in the company's growth prospects.
Klaviyo's decision to go public comes at a time when the tech industry is witnessing significant transformations and challenges. As e-commerce and digital marketing continue to shape the business landscape, Klaviyo's IPO is poised to draw attention as it seeks to capitalize on its strong performance and further expand its foothold in the competitive realm of data and marketing automation.
Byju’s is undergoing a reorganization of its business operations
Byju’s, the prominent Indian edtech startup valued at $22 billion in its recent funding round, has announced a significant restructuring of its operations, leading to the departure of three senior executives. Among those leaving the firm are Mukut Deepak, who previously headed the classes 4-10 business; Himanshu Bajaj, who served as the head of tuition centers; and Prathyusha Agarwal, Byju’s chief business officer. This restructuring effort aims to streamline the company's organizational structure, consolidating four of its verticals into two distinct units, namely K-10 and Exam Prep. These changes coincide with Byju’s efforts to secure fresh financing and regain the confidence of its investors. As part of this process, Byju’s is reevaluating its agreements with lenders and one major investor to simplify its commitments.
The departure of these senior executives comes in the wake of a series of significant developments at Byju’s. Deloitte and three key board members recently resigned from the company, citing various concerns within its operations. In a critical statement last month, Prosus, a major investor, raised questions about Byju’s reporting and governance structures, stating that they hadn't evolved sufficiently given the company's scale. Prosus also claimed that Byju’s had disregarded advice and recommendations from one of its directors, despite multiple attempts to provide guidance.
Byju’s spokesperson stated that the restructuring has placed two seasoned and senior leaders in charge of the newly defined verticals. Ramesh Karra is now leading the K-10 vertical, while Jitesh Shah is heading the exam prep business. The departure of these executives reflects Byju’s commitment to reshaping its operations and governance to ensure sustainable growth and maintain its position as a leading player in the competitive edtech sector. The company expressed gratitude for the contributions of the departing executives and wished them success in their future endeavors.
Recent Funding Recap 🤝
Otto - $43 Million Series B
Otto, previously known as TeleVet, is simplifying the process of scheduling medical appointments for pets, addressing a growing need in the veterinary industry. This veterinary software company provides clinics with a comprehensive practice management system, covering everything from appointment scheduling to after-hours triage, payments, and digital prescription refills. Otto's system seamlessly integrates with existing veterinary platforms such as Cornerstone, Neo, and AVImark, ensuring data accuracy and completeness. By streamlining these processes, Otto claims it can save veterinary teams up to eight hours per week.
The challenges faced by veterinary clinics, such as staff burnout and disruptions in care and communication, have inspired Otto's innovative approach. Otto's recent growth is impressive, with a 600% increase in its customer base, adding over 8,000 new veterinary clinics and hospitals in the past year. The company also managed to reduce appointment no-shows by half and cut call volumes by approximately 70% through automated prompts.
Otto's $43 million Series B funding round, led by Mercury Fund, demonstrates investor confidence in the company's approach. With continued growth and innovative solutions, Otto aims to reach a breakeven point by the end of 2025. The company's new name, Otto, reflects its mission to automate tedious tasks, allowing veterinary staff to focus on delivering excellent healthcare.
AI21 Labs - $155 Million Series C
AI21 Labs, an Israeli startup specializing in text-generating AI tools, has successfully raised $155 million in a Series C funding round. This funding was led by Walden Catalyst and included participation from Pitango, SCB10X, b2venture, Samsung Next, and Amnon Shashua, who is not only an AI21 Labs co-founder but also the founder of Intel-owned Mobileye. Google and Nvidia also took part in the round. The funding brings AI21 Labs' total capital raised to $283 million, and it now holds a valuation of approximately $1.4 billion, slightly higher than the previously reported figure of $1.2 billion.
AI21 Labs made its debut in October 2020 with the launch of its AI writing tool called Wordtune. Since then, the company has experienced significant growth, doubling its workforce and expanding its product offerings. The startup's flagship product, AI21 Studio, is a developer platform that enables the creation of custom text-based business applications using AI21's proprietary text-generating AI models, including the advanced Jurassic-2 model. Additionally, the company offers access to Wordtune, a multilingual reading and writing AI assistant similar to Grammarly.
One of AI21 Labs' strengths lies in the versatility and sophistication of its AI models, as well as the ability to integrate with existing platforms used by veterinarians, such as Cornerstone, Neo, and AVImark. The startup's solutions cater to a wide range of generative AI use cases, including summarization, paraphrasing, and grammar and spelling correction. Furthermore, AI21 Labs' models support multiple languages, including Spanish, German, Italian, and Dutch.
Busright - $7 Million Series A
BusRight, a provider of school bus technology focused on safety and efficiency, has raised $7 million in a Series A funding round led by Las Olas Venture Capital, with participation from Ubiquity Ventures, Underscore VC, Long Journey Ventures, SilverCircle, Automotive Ventures, Alumni Ventures, CreativeCo Capital, and angel investors. BusRight's journey started when a high school senior, Keith Corso, shared his idea with Phil Dunn, who at the time was the Chief Information Officer (CIO) at Greenwich (CT) Public Schools. Following this, Corso pursued higher education at Northeastern University, while Dunn later became the CIO of Broward County (FL) Public Schools, one of the nation's largest school districts. During his tenure, Dunn oversaw the technology operations for an extensive school bus fleet.
The funds will be used to double the employee headcount, accelerate product development, and expand its customer base in K-12 education transportation systems in the U.S. School buses transport over 26 million students daily, yet many school bus drivers are quitting at record rates, leading to shortages. BusRight's technology helps K-12 schools, bus drivers, parents, and caregivers streamline bus route planning and management, navigation, and real-time tracking to enhance student safety and communication. The company offers routing software, real-time GPS, dynamic driver navigation, and a bus tracking app for parents. It aims to provide one centralized platform to simplify operations for school administrators, reducing the burden on drivers and improving visibility for parents.
Amazon Acquires Command Line Autocomplete Startup Fig
Amazon has acquired Fig, a startup focused on enhancing the command line terminal experience. Fig, founded in 2020 in San Francisco, had raised over $2 million in funding and gained support from notable backers, including Y Combinator, General Catalyst, Datadog CEO Olivier Pomel, and others. The company's tools include features like "autocomplete," which provides customized suggestions for developers as they type commands, aiming to save time and reduce repetitive keystrokes. While graphical user interfaces dominate, Fig targeted developers who prefer text-based command line interfaces for their efficiency and flexibility.
Amazon's interest in Fig may be related to the generative AI revolution, where Fig's technology can enhance developers' experiences by offering helpful suggestions. This aligns with Amazon's broader generative AI ambitions and its launch of AI pair-programmer CodeWhisperer. Fig had already garnered thousands of users from major organizations, including Google, Microsoft, and Amazon itself. Amazon's acquisition may help it compete in the generative AI space with rivals like Google and Meta, which have similar tools. Existing Fig users will still be supported, but new signups will be temporarily halted as Amazon integrates Fig with AWS. The long-term impact on developers working with other cloud providers remains uncertain.
As always, stay tuned for more updates and insights from the team at INTELLI™.