Naver agrees to acquire fashion market Poshmark for $1.2 billion • TechCrunch

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Naver agrees to acquire fashion market Poshmark for $1.2 billion • TechCrunch
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Naver, the South Korean search giant, today announced plans to acquire second-hand clothing marketplace Poshmark for $1.2 billion in cash. The deal values ​​Poshmark’s publicly traded shares at $17.90 – a 15% premium to today’s closing price – and the companies expect it to close by the first quarter of 2023, subject to Poshmark shareholder approval and “the satisfaction of certain other customary closing conditions”.

If the transaction is successful, Poshmark will become a stand-alone subsidiary of Naver led by CEO Manish Chandra and Poshmark’s current management team. It will also continue to operate under its existing brand and maintain its staff, user base, and headquarters in Redwood City, CA.

In a press release, Naver and Poshmark lay out several arguments as to why the deal makes sense for both parties. By acquiring Poshmark, Naver hopes to capitalize on the service’s growing social shopping platform, where users buy and sell clothes online, with its “technological prowess”. As for Poshmark, it is supposed to benefit from Naver’s image recognition and smart goal search technologies, which Naver says will enable the shopping platform to offer new search, recommendation and shopping that allow users to find clothes by searching colors, designs and materials and identifying where to find products by scanning clothes using their phone’s camera.

Naver also touts its robust ad serving and payments infrastructure, saying Poshmark will be able to leverage it to better analyze sales statistics and serve international customers. The long-term plan is to – with the support of Naver – expand Poshmark’s business into other developed markets in Asia and elsewhere where Naver has significant business holdings, in part by integrating some of the live shopping services from Naver to the Poshmark platform. At the same time, Poshmark will leverage Naver’s U.S. footprint, which includes digital comics portal Webtoon Entertainment and online storytelling platform Wattpad.

Naver optimistically predicts the acquisition could boost Poshmark’s annual revenue “beyond” 20% and save the company $30 million in annual run rates within two years.

Poshmark CEO Manish Chandra said in a press release:

The opportunity to join forces with Naver – one of the most innovative and successful internet companies in the world – is a testament to the strength of our brand, our operating model and what we have built over the decade with our talented team and incredible community. . Our industry continues to evolve at a rapid pace, and we’re excited to continue leading the future of shopping by providing our community with an unparalleled experience that’s simple, social, fun and sustainable. This is a very attractive opportunity for our employees, who will benefit from being part of a larger global organization with shared values ​​and complementary strengths. This transaction also delivers significant and immediate value to our shareholders. Longer term, as part of Naver, we will benefit from their financial resources, significant technology capabilities and leading presence across Asia to expand our platform, improve our products and user experiences and penetrate new and vast markets. I look forward to partnering with Naver as we take our business into its next phase of growth.

Naver CEO Choi Soo-Yeon said:

The combination will create the strongest platform to power communities and reshape commerce. Poshmark is America’s definitive fashion brand that provides a social network to buy and sell clothes. Naver’s cutting-edge technology in search, AI recommendation and e-commerce tools will help propel the next phase of Poshmark’s global growth. Poshmark is a natural fit for our business – our two companies share a common set of values ​​and vision around content, community and empowerment. The combination of Naver and Poshmark will immediately put us at the forefront of creating a new socially responsible and sustainable shopping experience designed around sellers of all sizes and interests – from individual sellers and influencers to professional sellers, brands and specialty shops – and a large, loyal and highly engaged social community. We are excited to work closely with Manish and his talented team to create lasting value for all of our stakeholders.

Poshmark’s exit comes more than a decade after it was founded in 2011. Chandra – alongside Tracy Sun, Gautam Golwala and Chetan Pungaliya – started the business out of Chandra’s garage, funding it in part with proceeds from sales from Chandra’s former company, social shopping startup Kaboodle, to Heart. Prior to its Nasdaq listing at a valuation of over $3 billion, Poshmark raised over $160 million in venture capital from venture capital firms such as Temasek, Menlo Ventures, GGV Capital and Mayfield.

Poshmark claims to have over 80 million registered users.

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