Klaviyo buys AI startup Agency and gets a new product chief in the same deal
The e-commerce marketing platform is acquiring a three-year-old AI startup founded by a serial entrepreneur who once hired Klaviyo's own CEO, and is now joining to lead its AI push.
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 joins Klaviyo as chief product officer, overseeing a 25-person team.
- Klaviyo completed its IPO, the first public sale of its shares, in September 2023 at a $9.2 billion valuation.
- The acquisition targets two existing Klaviyo 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 run ended with a deal announced this week. Financial terms weren't 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 executes multi-step tasks without a human clicking through each step, focused on customer relationship management.
That work folds into two products Klaviyo already runs. Composer helps businesses build email and SMS marketing campaigns automatically. Customer Agent covers the post-purchase side: answering order questions, 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 he co-founded, 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 earliest engineers. Bialecki went on to co-found Klaviyo. When Klaviyo took its first outside funding in 2015, Bialecki brought Torres in as a seed investor. Torres's three-year-old Agency 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 already on Klaviyo, the practical aim is smarter automation. Routine customer interactions, a shopper asking where their parcel is, get handled by AI without staff stepping in.
The competitive pressure is genuine. Bialecki pointed to Decagon and Sierra as companies building similar business-facing AI agents. His argument for Klaviyo's edge: years of accumulated customer purchase and behaviour data that newer rivals can't easily replicate. Our 30 July report on Okta's $200 million acquisition of security startup Permiso showed how quickly incumbents are moving to bolt AI capabilities onto their platforms rather than build them from scratch.
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, a big jump from 200,000.
Torres takes over the product role immediately. A founder who's shipped and sold business software twice at scale is a credible pick for that job. Whether Agency's technology is actually the differentiator here, or whether the real asset was always the reunion between two people who trust each other, is the question worth watching.
