Naver, the South Korean search large, at present announced it plans to accumulate secondhand attire market Poshmark for $1.2 billion in money. The deal values publicly-traded Poshmark’s shares at $17.90 — a 15% premium over at present’s closing value — and the businesses count on it to shut by Q1 2023, topic to approval by Poshmark stockholders and “the satisfaction of sure different customary closing circumstances.”
Assuming the transaction goes by, Poshmark will turn out to be a standalone subsidiary of Naver led by CEO Manish Chandra and Poshmark’s present administration staff. It’ll proceed to function below its present model, Naver says, and keep its workers, person base and headquarters in Redwood Metropolis, California.
In a press launch, Naver and Poshmark lay out a number of arguments as to why the deal is smart for each events. By buying Poshmark, Naver plans to mix the service’s rising social procuring platform, the place customers purchase and promote used attire, with its “technological prowess” and present communities, like the net discussion board Naver Café. As for Poshmark, it stands to profit from Naver’s picture recognition and search applied sciences, which Naver says will enable the procuring platform to supply new discovery and suggestion experiences that allow customers discover attire by looking out colours, designs and supplies and determine the place to search out merchandise by scanning garments utilizing their smartphone cameras (a la Google Lens).
Naver additionally touts its strong ad-serving and funds infrastructure, averring that Poshmark will be capable to leverage it to raised analyze gross sales statistics and serve worldwide clients. The long-term plan is to, with Naver’s backing, develop Poshmark’s enterprise into further developed markets in Asia and elsewhere the place Naver has important holdings — partially by integrating a few of Naver’s stay procuring companies with the Poshmark platform. On the similar time, Poshmark will assist Naver to determine a stronger U.S. foothold inclusive of the stateside properties the tech large already owns, like digital comics portal Webtoon Leisure and on-line story platform Wattpad.
Naver optimistically predicts the acquisition might develop Poshmark’s annual income “past” 20% and save the corporate $30 million in annual run charge inside two years.
Poshmark CEO Manish Chandra mentioned in a press launch:
The chance to hitch forces with Naver — one of many world’s main and most revolutionary and profitable web firms — is a testomony to the energy of our model, working mannequin and what we’ve constructed during the last decade with our gifted staff and wonderful neighborhood. Our business continues to evolve at a speedy tempo, and we’re excited to proceed to steer the way forward for procuring by offering our neighborhood with an unparalleled expertise that’s easy, social, enjoyable and sustainable. This can be a extremely compelling alternative for our workers, who will profit from being half of a bigger, world group with shared values and complementary strengths. This transaction additionally delivers important and speedy worth to our shareholders. Long term, as a part of Naver, we’ll profit from their monetary assets, important expertise capabilities and main presence throughout Asia to develop our platform, elevate our product and person experiences and enter new and huge markets. I stay up for partnering with Naver as we take our firm into its subsequent part of development.
Naver CEO Choi Soo-Yeon mentioned:
The mix will create the strongest platform for powering communities and re-fashioning commerce. Poshmark is the definitive model for vogue in the US that gives a social community for getting and promoting attire. Naver’s main expertise in search, AI suggestion and e-commerce instruments will assist energy the subsequent part of Poshmark’s world development. Poshmark is a pure match for our enterprise — our two firms share a typical set of values and imaginative and prescient round content material, neighborhood and empowerment. Bringing Naver and Poshmark collectively will instantly put us on the forefront of making a brand new, socially accountable and sustainable procuring expertise designed round sellers of all sizes and pursuits — from particular person and influencer sellers to skilled sellers, manufacturers and specialty boutiques — and a big, loyal and extremely engaged social neighborhood. We’re excited to work carefully with Manish and his gifted staff to create lasting worth for all our stakeholders.
Poshmark’s exit comes over a decade after its founding in 2011. Chandra — alongside Tracy Solar, Gautam Golwala and Chetan Pungaliya — began the corporate in Chandra’s storage, funding it partially with the proceeds from the gross sales of Chandra’s earlier firm, social procuring startup Kaboodle, to Hearst. Previous to its itemizing on the Nasdaq at a valuation of over $3 billion, Poshmark raised greater than $160 million in enterprise capital from VC corporations together with Temasek, Menlo Ventures, GGV Capital and Mayfield.
Poshmark claims to have over 80 million registered customers. However regardless of that enormous potential buyer base, the corporate has carried out unpredictably in recent times, reporting a lack of $44.4 million for 2021 after raking in a $25.2 million revenue in 2020.