March 3rd, 2025: Is Beyond.com doomed? Klaviyo reports 2024 earnings, Klaviyo coming for Salesforce Service Cloud, and Paypal Investor Day offers problematic vision
Could Klaviyo Be Bigger than Shopify?
Why did Paypal Fumble Its Recent Investor Day?
We break down this and other key topics in our latest Watson Weekly podcast, headed straight to your earholes on your favorite podcast platform.
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It’s March 3, 2025 and this is the Watson Weekly - your essential eCommerce Digest!
Today on our show:
Is Beyond.com Doomed?
Klaviyo Reports 2024 Earnings
Klaviyo Coming for Salesforce Service Cloud
Paypal Investor Day Offers Problematic Vision
- and finally, The Investor Minute which contains 5 items this week from the world of venture capital, acquisitions, and IPOs.
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To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
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BUT FIRST in our shopping cart full of news….
Is Beyond.com Doomed?
Beyond Will Be Profitable in Quarter Never of 2025 - This Place is Doomed
One fork incoming at Beyond. When a company says they are "absolutely 100% behind the issues" it means they are absolutely 100% not behind the issues.
Marcus Lemonis the grifter has no business in retail. The machinations between Beyond and Bed Bath and the zombie companies it's partnered with are too complex to even keep track of anymore.
Q4 revenue fell 21%. Company - which btw is a dropship model - just slashed SKUs in half to 6 million, while cutting vendors. The company lost $259 million last year.
Someone want to mention to them that this is a death spiral for a marketplace? You are supposed to want to expand selection. This is not a new super-secret "reverse-Amazon flywheel" framework that only Mr. Lemonis knows about.
What's more, Beyond might have a "few profitable months" sometime this year. Again for the record. Similar to Flexport (like how I slipped them in here for no apparent reason) and their stupid "fortress balance sheet" when someone tells you they are definitely going to be profitable in the "second half of the year", you might as well replace the word year with "never."
Many well-meaning analysts are making nice-sounding noises humoring Mr. Lemonis. Why, I truly have no idea.
But oh wait, grift, I mean blockchain to the rescue. The company wants to create a blockchain for its customers to store its real estate assets.
Hello, 2017 called and wants its grift back. A memecoin might be a better path to success.
Someone please put a silver bullet into the previously halfway-venerable brand. At least it will keep the werewolves at bay.
Wait a minute..... "wolfcoin" sounds like a fantastic revenue idea.
No one tell Lemonis.
[References:]
Our Second Story
Klaviyo Reports 2024 Earnings
Klaviyo 2024 Earnings -- Expanding Up, Down, and Sideways
Klaviyo has a three-pronged growth strategy and it is starting to play out well, especially in an environment where there is not a lot of great competition for what they are doing (which is surprising). Here are a few points on each:
Overall:
* Full year revenue up 34% to $937 million
* FCF now $150 million
* Full year revenue guidance slightly down to 23-24% y/y
Expanding Up:
* Going to market w/ Shopify in larger customers (Reebok, Champion, Barkbox)
* Full Year International growing 42% y/y - matching Shopify's growth patterns
* 2,850 customers, generating over $50,000 in ARR, up 46% year-over-year.
Expanding Down:
* Now the "default" marketing platform for WooCommerce. What?!
Well, why not do it is the answer? Who else are they going to pick, Mailchimp? (asking for a friend).
* 15k shared customers today, but WooCommerce has 4 million customers globally. This is a super-smart deal even if it is more downmarket. Why not scoop and score?
* Only potential downside risk is distraction (which is real): you are who you serve most.
Expanding Sideways: Growth within customers and across customers
* Average Revenue Per Customer Up 15% Y/Y indicating growth within accounts.
If I had to target a few risks for Klaviyo:
* As people adopt SMS, their gross margins decrease. This is currently their highest upsell product.
* Not super-clear that Enterprise is interested in adopting them for SMS (does not seem like they will report it out going forward)
* Woo could pull them further down-market, alienating the needs of their top customers. Shopify has (mostly) been able to avoid this problem but it's a tricky balance not every company can find.
On the upside, however, there is still a lot to like here. They could end up being a bigger business than Shopify if they play their cards right. Seems to this observer that they have more easily monetizable product expansion opportunities in other platforms, other verticals and data. All areas which are somewhat out of reach to Shopify itself. Still founder-led
Probably one of my stealth long-term companies to watch, to the extent that a $1B+ run-rate ARR company like Klaviyo can be considered stealth
[References:]
Our Third Story
Klaviyo Coming for Salesforce Service Cloud
There has been a lot of chatter about Klaviyo introducing a D2C CRM in its software and how that is going to disrupt. But a lot of the attention has been paid to Gorgias. Gorgias is going to do just fine.
Klaviyo is attempting to be the Salesforce of the Shopify ecosystem. Just look at this quote:
"Most CRMs were designed for B2B sales cycles, not the fast-moving, high-volume world of B2C." (Klaviyo press release)
Which software solution do you think they are mentioning here? Does anyone think Gorgias was designed for B2B?
Me neither.
Salesforce Service Cloud has billions in revenue, as reported by Salesforce earnings calls (it's in the Platform and Other category. Gorgias, on the other hand, is a startup.
Let's look at a few facts:
* Large and Enterprise brands are moving from Salesforce Commerce Cloud to Shopify. And Klaviyo has been dragging their feet on CRM (in fairness to develop products a little closer to home).
* Salesforce Marketing and Service Cloud are clunky and extremely difficult to implement. It's like driving around a tank when you wish you had a sportscar. Prices keep going up and service levels do not. At least Demandware was a good solution at one time. ExactTarget? It wasn't even a great solution in its heyday.
* Which means there's a gap in the market. If you want to reduce your TCO, you are kind of locked into a Salesforce ecosystem because you can't leave it. You kind of still can't leave it because Klaviyo just getting started here.
Yes, Klaviyo would love to disrupt solutions like Aftership, Gorgias, Loop, and all the others, but ... that's not where the real money is.
The crown jewel is in going after Salesforce, and riding the coattails of Shopify right up-market.
[References:]
https://www.linkedin.com/posts/ecommercestrategyconsulting_klaviyo-not-coming-for-gorgias-really-coming-activity-7299771313085136897-FiLu?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAABzTYBMEkpgbpDWbI9miv0bkNA3W2mE1I
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And Our Last Story
Paypal Investor Day Offers Problematic Vision
Paypal the company seems to be offering Declarations, Hallucinations and Complications
Paypal CEO has declared two things: they are going to win checkout and they are going to be the Agentic AI company to help create a full-journey eCommerce experience.
Sounds complicated to me.
Paypal praised its legacy but says it needs to evolve in these ways:
* Buy: Helping buyers at the point of purchase understand how to spend their money.
* Acquire: Helping merchants find their next customer.
* Service: Helping consumers in post-purchase.
Buy:
I expect they are talking about the assets related to Honey. But more, they are talking about pooling resources with friends for specific tasks (like a camping trip they mentioned on the call), and then allowing brands to use that data in their purchase funnels. It's an interesting idea, and perhaps with AI, keywords are enough to give the retailer hints. But it's assuming the consumer enters this info which is problematic. How many people will use Paypal Pools?
I didn't even know about the feature, and I track Paypal closely. When was the last time I purposefully opened the Paypal app? Not recently unless forced.
Problematic. And I want Paypal to have data about my purchase behaviors and share those with retailers? Trust issues abound.
Paypal also seems like it wants to build a marketplace using Agentic AI based on Paypal profile data. At this point, I started to wonder what the CEO was smoking. Who the hell starts a shopping journey at Paypal, and if I am using ChatGPT what would be the conversion rate of users connecting their Paypal account to it?
Paypal wants to create a "commerce platform that connects LLMs, merchants, consumers, and Paypal payment instruments."
What the hell this means I have no idea. I like Amazon, it seems to work and I know I will get the item. Who is going to implement your super LLM payment buying API and make it the center of their experience?
Paypal says this is their strategy. But, it's actually a vision. A strategy would help us understand how they pull this off - in this department not much was offered.
Acquire:
I expect them to borrow pages from Klarna's playbook - but Paypal has a much wider reach. Reminds me of Walmart following Amazon. It could work.
Service:
Not clear what Paypal has in mind. I think that Paypal sees what Shopify did with Shop App (nee' Arrive) and so tracking is a challenge.
Paypal wrapped the talk talking about how they are modernizing their development environment, mostly speaking about things the company should have done 10 years ago. Braintree is now "cloud-native". In 2025. Yippee.
All this to say, they are going to build a lot of things. They are going to imagine a lot of things. All the while, what merchants want are just cheaper rates. I am not sure they imagine an architecture where their payment provider is involved in all these areas.
Sounds like a big mess. And sounds like Paypal has marketplace envy.
[References:]
It’s That Time Friends, for our Investor Minute. We have 5 items on the menu today.
First
B2B marketplace Auto Hauler Exchange Raises $5M Series A
Vehicle transportation B2B marketplace Auto Hauler Exchange (AHX) has raised $5 million in Series A funding that will be used to hire talent, scale its operations, expand its team, and invest in its marketplace platform. This is a classic example of in niches there are riches.
Link: https://www.digitalcommerce360.com/2025/02/05/auto-hauler-exchange-ahx-funding-b2b-marketplace/
Second
FedEx Acquires Route Optimization Platform RouteSmart Technologies
FedEx has acquired RouteSmart Technologies, a route optimization platform, for an undisclosed amount. The company will be a standalone entity under FedEx Dataworks, a direct subsidiary of Federal Express Corporation. This acquisition will enable FedEx to drive efficiency across its operations and widen the technology solutions it can offer customers. RouteSmart Technologies will continue to provide waste collection, postal and parcel, public works, and newspaper route optimization services.
Third
Zeta Raises $50M At $2B Valuation In New Funding
Zeta, a banking technology platform and credit card processor, has raised $50 million in strategic funding at a $2 billion valuation from Optum, a healthcare company. The new funding will be used to finance growth. Zeta enables financial institutions to leave legacy systems and utilize cloud infrastructure to launch and manage credit cards, checking accounts, and loans. Why would a healthcare company invest in a fintech platform? And why does a company with a 2 billion dollar valuation need only $50 million dollars? Because it is far from profitability, that is usually why.
Link: https://techcrunch.com/2025/02/10/zeta-valued-at-2b-in-new-funding/
Fourth
Probiotic Soda Brand Olipop Valued At $1.85B In $50M Series C Funding Round
Probiotic soda brand Olipop has raised $50 million in Series C funding at a valuation of $1.85 billion that will be used to expand product development, marketing, and distribution. The company reportedly recorded revenue of between $400 and $450 million last year. The better-for-you beverage sector is currently a battle between Olipop and competitor Poppi. The company claims to be profitable and maintaining triple-digit growth.
AND FINALLY …
UVIONIX Raises $3.5M In Seed Funding
Warehouse autonomous robotics company UVIONIX has raised $3.5 million, which will be used for product development and go-to-market expansion in the US and Europe. Warehouse inventory management is complex and allows autonomous drones to use technology to monitor and report inventory levels without adding this to warehouse staff tasks. Humans should be doing tasks that utilize decision-making and not repetitive tasks that can be automated.
Link: https://techfundingnews.com/bulgarian-founded-ai-flying-robots-for-warehouses-soar-3-5m-funding/
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Did you know that RMW Commerce has another podcast? Check out The Watson Weekend for an unfiltered and lively eCommerce chat each week with me, Rick Watson, my co-host Jess Lesesky, and an array of interesting guests and topics. All focused on eCommerce. You can find the Watson Weekend by searching for it on iTunes, Spotify, or Youtube.
That’s all for this week! Till next time Watsonians.....
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Hi, I’m Rick Watson, CEO and Founder of RMW Commerce Consulting and host of the Watson Weekly podcast - your essential eCommerce Digest.
Our production partner for the series is Podcast on the Ply. This podcast is produced by RMW Commerce.
To hear new episodes of the show every Monday morning, subscribe now at rmwcommerce.com/watsonweekly and wherever you get your podcasts.
