Shopify invests $100M in email startup Klaviyo, latest in a string of deals by e-commerce giant

Shopify Inc. headquarters. in Ottawa on May 3.Sean Kilpatrick/The Canadian Press

Shopify Inc. SHOP-T continues to use its influence as one of the largest e-commerce platforms in the world to further benefit from the spin-off value it has created.

On Tuesday, Klaviyo Inc. said. For Email Marketing it has secured a strategic investment from Shopify in exchange for becoming the Ottawa Company’s “Recommended Email Solutions Partner” Shopify Plus, serving its larger business clients. The $100 million investment, which adds to the $678 million raised by Klaviyo previously, was made last week, according to a filing the Boston private firm filed with the U.S. Securities and Exchange Commission.

“Klaviyo is a prime example of the huge impact the Shopify app and partner ecosystem can have on the next generation of commerce solutions for independent brands,” said Harley Finkelstein, president of Shopify, in a press release.

“Partnerships with leading platforms like Shopify that share our values ​​and mission is critical to how we help solve those challenges that creators and brands face. We are excited about what this ongoing partnership represents for our customers,” Klaviyo CEO and co-founder Andrew Bialecki said in the statement.

The deal is a reminder that despite a sharp decline in stocks, slowing growth, impending losses in the second half, and a 10 percent headcount cut last week, Shopify remains a juggernaut in the online shopping world, rivaling Amazon in North America. In terms of the amount of e-commerce flowing through its platform. Total merchandise volume, or the value of sales through Shopify from its $2 million-plus merchant customers, was $46.9 billion in the second quarter ended June 30, up 11 percent from the same period a year earlier.

Shopify has prided itself in the past that its partners generate far more revenue than they do. But in the past two years, Shopify has entered into lucrative agreements with several companies that provide products to the two million merchants who use Shopify to run their stores, which have expanded into giants in their own right.

Shopify agreed in 2020 to make Affirm Holdings Inc. In San Francisco, the exclusive provider of “buy now, pay later” financing options to its merchants for consumers. Last year, I reached a similar agreement with Global-E Online Ltd. Israel to become the exclusive provider of cross-border solutions to its traders. At their peak last year, those stocks were worth billions of dollars. Even after a sharp drop in tech valuations this year, Shopify’s combined stakes in Affirm and Global-E stood at $801 million as of June 30. It also entered into a multi-year partnership with the private Israeli e-commerce marketing firm Yotpo Inc. last September in a deal valued at tens of millions of dollars.

Shopify has invested hundreds of millions of dollars in other companies that have benefited from its relationship with the e-commerce giant, including a $375 million investment in its payment processor Stripe, Inc. It also invested, among other things, in merchant financing Marketplace Pipe Technologies Inc. and Swyft Technologies Inc. in Toronto, a same-day delivery software provider and Crossing Minds Inc. Single, Inc., a San Francisco startup that enables merchants to deliver “customized experiences” to customers, and Single, Inc. , a Nashville-based startup that provides tools for Shopify merchants to sell music, NFTs, and video rentals, and to stream events on the platform.

Shopify recently closed the largest acquisition in its history, paying $2.1 billion to Deliverr, a shopping logistics startup, to support its move toward providing logistical support to its customers.

Your time is precious. Get our top business headlines newsletter easily delivered to your inbox in the morning or evening. Register today.

Leave a Comment