Klaviyo buys AI startup Agency and gets a new product chief in the same deal

Key points

• Klaviyo, a publicly traded e-commerce marketing platform, agreed to acquire Agency, an AI startup founded in 2023, for undisclosed terms.
• Agency had raised $32 million from Sequoia, Menlo Ventures, and Felicis before the deal closed.
• Agency founder Elias Torres will join Klaviyo as chief product officer, leading a 25-person team.
• Klaviyo completed its initial public offering, the first sale of company shares to the public, in September 2023 at a $9.2 billion valuation.
• The acquisition targets Klaviyo's two existing AI agents: Composer, which builds marketing campaigns, and Customer Agent, which handles post-sale requests like returns and order tracking.

Klaviyo, the marketing automation platform used by roughly 200,000 online retailers, is buying Agency, a small AI startup whose three-year lifespan ended with a deal announced this week. Financial terms were not disclosed, first reported by TechCrunch.

What does Klaviyo actually get from this deal?

It gets Agency's technology and its founder. Agency built AI agents, meaning software that can carry out multi-step tasks on its own without a human clicking through each step, focused on helping companies manage customer relationships.

That work will fold into two products Klaviyo already runs. Composer helps businesses build email and SMS marketing campaigns automatically. Customer Agent handles the post-purchase side: answering questions about orders, processing returns, tracking packages. Klaviyo CEO Andrew Bialecki told TechCrunch the combined platform could eventually serve millions of businesses.

Who is Elias Torres, and why does this feel personal?

The history here stretches back 15 years. Torres is a serial founder with two large exits: Performable, sold to HubSpot in 2011, and Drift, a sales software company sold to Vista Equity in 2021 for $1.2 billion.

In 2010, Torres hired a recent Harvard graduate named Andrew Bialecki as one of Performable's first engineers. Bialecki went on to co-found Klaviyo. When Klaviyo raised its first outside money in 2015, Bialecki brought Torres in as an early investor. Torres's $32 million Agency startup is now part of the company his former mentee built.

As part of the acquisition, Torres becomes Klaviyo's chief product officer, overseeing the 25-person Agency team.

What does this mean for businesses using Klaviyo?

For shop owners and online retailers already on Klaviyo, the practical aim is smarter automation. The goal is that the AI handles more routine customer interactions, such as a shopper asking where their parcel is, without staff needing to step in.

The competitive pressure is real. Bialecki pointed to rivals including Decagon and Sierra as companies also building business-facing AI agents. His argument for Klaviyo's edge: years of accumulated customer purchase and behaviour data that newer competitors cannot easily replicate.

What happens next?

Klaviyo's stock has fallen alongside other software companies in the broader market pullback, so the acquisition is partly a bet that AI agents can reinvigorate growth. Bialecki has said he wants to reach millions of businesses over the coming years, a significant jump from the current 200,000.

Torres takes over the product role immediately, giving the expanded team a founder with direct experience shipping and selling business software at scale.