Shares of Klaviyo Inc. rose more than 8% in their trading debut this morning, valuing the marketing software provider at about $10 billion.

The positive market reception bodes well for software-as-a-service companies that have been stymied from going public by a dead market for initial public offering.

The company’s IPO the day prior saw investors purchase 19.2 million shares worth about $576 million. Klaviyo issued 11.5 million of those shares to raise $345 million. The remaining stock was sold by existing investors. 

Klaviyo’s underwriters have the option to buy 2.88 million additional shares at the IPO price within 30 days. Those shares would be worth $86.4 million minus underwriter discounts and commissions.

Boston-based Klaviyo provides a customer data platform, or CDP, that is mainly used by e-commerce companies to understand shoppers’ buying preferences. The platform can track business metrics such as the average value of purchases made at an online store. It also provides access to other data, such as information on how an e-commerce’s financial performance compares with rivals.

The second main selling point of Klaviyo’s CDP is that it allows companies to group customers with similar interests into so-called segments. From there, marketers can create personalized promotions for each segment. An electronics retail, for example, could offer a discount on phone case purchases to users who have bought a handset in the past 30 days.

Klavyio’s platform enables companies to distribute promotions via emails, SMS messages and push notifications. It also promises to ease a number of other marketing tasks. The platform can, for example, automate the process of asking online shoppers to leave product reviews.

Klaviyo’s top line is growing rapidly. Its revenue jumped 54% year-over-year, to $320.7 million, in the six months through June 30. The software maker generated that revenue from a customer base that comprises more than 130,000 companies.

Klaviyo swung to profitability in the quarters leading up to its public offering. According to the company’s IPO prospectus, it generated net income of $15.16 million in the six months ended June 30 after losing $24.56 million a year earlier.

Klaviyo will use the proceeds from the IPO to support revenue growth. As part of the initiative, the company intends to launch several parallel customer acquisition initiatives. 

First, Klaviyo will work to expand adoption of its platform among midmarket companies and enterprises. As of June, about 1,458 of Klaviyo’s 130,000 customers were spending more than $50,000 a year on its platform. That represents a 94% increase from a year earlier. 

In conjunction, Klaviyo will seek to expand into new market segments. The company currently generates more than 70% of its revenue from online retailers. Following its IPO, Klaviyo intends to grow its presence in industries such as the wellness and restaurant markets.

The company already has a limited presence in those areas. ”This market expansion motion has largely been driven by our customers, without any marketing or product development investments by us,” Klaviyo detailed in its IPO prospectus. To accelerate that growth, Klaviyo will start actively investing in marketing and sales programs that target companies outside the e-commerce sector.

Klaviyo filed for its IPO last month on the same day as food delivery provider Instacart. The latter company, which is incorporated as Maplebear Inc., went public earlier this week. Instacart raised $660 million in its IPO after selling 22 million shares for $30 apiece. 

Photo: NYSE