Klaviyo Acquires Agency, Appoints Elias Torres as Chief Product Officer

What happened

E-commerce marketing automation platform Klaviyo reached an agreement to acquire the team and technology of Agency, an AI-native customer success company led by co-founder and CEO Elias Torres. Agency had raised $32 million from investors including Sequoia, Menlo Ventures, and Felicis prior to the acquisition. The transaction is expected to close in Q3 2026, though Klaviyo did not disclose the acquisition price or payment structure. Torres and Agency's 25-person team are expected to join Klaviyo following closing. Under the agreement, Klaviyo will acquire Agency's proprietary software and related intellectual property. Torres will become Chief Product Officer, reporting to co-CEO Andrew Bialecki, and will lead Klaviyo's agent product line including Composer (which builds marketing campaigns) and Customer Agent (which handles post-sale support like returns and order tracking).

Why it matters

The acquisition strengthens HubSpot competitor Klaviyo's position in the AI-driven customer relationship management space by adding proven AI agent technology and leadership. Torres brings more than two decades of experience building customer-engagement software, having previously co-founded Drift (sold to Vista Equity for $1.2 billion in 2021) and Performable (acquired by HubSpot in 2011). The deal places Torres in charge of Klaviyo's broader product organization, giving the acquisition strategic importance beyond adding individual AI products. For context, Klaviyo serves over 205,000 customers and generated $370.6 million in second-quarter revenue, growing 26% year-over-year. The company believes AI agents require detailed, real-time customer context, and its data infrastructure stores more than nine billion consumer profiles and ingests over a quarter of a trillion data points quarterly. Management pointed to early adoption of Composer and Customer Agent as evidence that brands are consolidating onto platforms capable of autonomously executing customer interactions.

Bigger picture

The acquisition reflects broader competitive dynamics in the B2C marketing and customer engagement software space, where companies like HubSpot, Salesforce, and others are racing to integrate AI agents into their platforms. Klaviyo positions itself as an autonomous B2C CRM that combines customer data, intelligence, marketing, and service capabilities. The company expanded its AI ecosystem during the quarter through integrations with Anthropic's Claude and Figma, and became a partner for Shopify Sidekick and Stripe Projects. International revenue grew 35% year-over-year, faster than overall company growth, as Klaviyo continues global expansion. The number of customers generating more than $50,000 in annual recurring revenue increased 36% to 4,477, suggesting larger enterprises are adopting the platform. Dollar-based net revenue retention reached 109%, indicating existing customers are expanding their spending. However, multi-product adoption remains an opportunity, with customers using three or more products generating only 20% of annual recurring revenue.

What to watch

Monitor whether Klaviyo successfully integrates Agency's technology and team, and whether the enhanced AI capabilities translate into stronger customer adoption and retention. Track third-quarter revenue guidance of $377 million to $381 million (representing 21.5% to 22.5% growth) and full-year revenue expectations of $1.526 billion to $1.534 billion (approximately 24% growth). Watch for updates on multi-product adoption rates, as most revenue still comes from customers using fewer than three products. Also observe how the acquisition affects Klaviyo's competitive position against HubSpot and other CRM platforms in the AI agent market, and whether the company can maintain its non-GAAP operating margin of approximately 14% while investing in AI development.