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Can the tech IPO market keep up its positive momentum?

This morning, Boston-based email marketing software maker Klaviyo raised its IPO price range to $27 to $29 per share, a few dollars more than its prior $25 to $27 per share estimate. This indicates the company gauged interest in its IPO to be high enough that it feels confident it can raise a few more dollars while also getting out at a better price.

Klaviyo is not alone in taking such an approach. As we saw last week, Instacart also slightly raised its own IPO price range, which likely means the grocery delivery company’s bankers and management are feeling confident that investor demand for new IPO shares is reasonably high.


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If Instacart’s IPO prices at the midpoint of its new price range, the company will be worth around $9.6 billion. That’s a material amount more than the $8.9 billion it was worth at the middle of its initial estimate.

Klaviyo’s is the more interesting repricing, however. At the middle of the new price range, its price tag will swell to $8.6 billion, per TechCrunch calculations, up from $8 billion at the midpoint of its previous estimate.

Why is Klaviyo’s repricing more important than Instacart’s? Because the latter’s investors are going to take a massive haircut on the last capital that went into the business regardless of some pre-IPO price movements.

Klaviyo, on the other hand, is a different story. The company was last valued at $9.5 billion, a figure it is now much closer to than it was just a few days ago.

Last week, before the company detailed its new price range, we had thoughts on just this scenario:

[I]f Klaviyo were to raise its price range before going public, or at least price a little above its initial pricing interval, we could very well see the company pull off an IPO that’s on par with its last private valuation.

If flat is the new up in the world of venture capital, going public with a price tag that’s in line with a bubble-era late-stage valuation is nothing less than a gobsmacking win. Investors funneled a mountain of capital into late-stage startups back in those golden days, expecting public-market multiples to remain hot. They did not, as we now know, and the resulting repricing has been brutal. Perhaps Klaviyo can show others a way out?

Klaviyo is still nearly a billion dollars short of its final private price. But public markets sometimes have an inertia to them, so this price hike could preserve its momentum and see the company list at, say, $30 per share and enjoy a modest day-one bump.

That’s why the Arm IPO is welcome news for more than just SoftBank. The fact that Arm’s shares have risen since its IPO could mean that investors may be okay with paying a bit more than the list price for new tech company stock. That could be just what Klaviyo needs to prove that not all the valuations that were set a few years ago are bullshit.

And if investor sentiment does turn out to be that good, these IPOs could prove a boon for late-stage startups everywhere, which are hungry for some good news and indications that going public is not a death sentence — at least for some companies.

Not that we expect many late-stage startups to manage to pull off a Klaviyo — it is more capital efficient and profitable and is growing faster than most unicorns today. But, hell, since when is a high-water mark a bad thing in this context?

Just so we don’t overstate the case

Given how few IPOs we have seen since 2022 started, we should be on our guard and not become overconfident on our view of the market. Yes, Cava and Oddity did well, and yes, Arm is doing fine, but that doesn’t mean the IPO market is back and well.

Instacart and Klaviyo may be all set to have strong pretrading debuts this week, but that doesn’t mean it’s going to be all sunlight and daisies for a unicorn limping to the public markets with 30% revenue growth, negative free cash flow and no near-term hopes for even adjusted profitability.

In other words, this week’s IPOs are shaping up to be more directional good news than panacea. It may serve us all well to keep that in mind.