Naver, the South Korean search giant, announced today that it plans to acquire second-hand clothing marketplace Poshmark for $1.2 billion in cash. The transaction values Poshmark’s publicly traded shares at $17.90 — a premium of 15% over today’s closing price — and the companies expect to close by the first quarter of 2023, subject to Poshmark shareholder approval and ” the satisfaction of certain other customary closing conditions”.
Assuming the transaction goes through, Poshmark will become a separate subsidiary of Naver, led by CEO Manish Chandra and Poshmark’s current management team. It will continue to operate under its existing brand, Naver says, and retain its employees, user base and headquarters in Redwood City, California.
In a press release, Naver and Poshmark make several arguments as to why the deal makes sense for both parties. Through the acquisition of Poshmark, Naver plans to combine the service’s growing social shopping platform, where users buy and sell clothes online, with its “technological prowess” and existing communities like the Naver Café forums. Poshmark will benefit from Naver’s image recognition and search technologies, which Naver says will enable the shopping platform to offer new search, recommendation and shopping experiences that allow users to find clothes by searching for colors, designs and materials and identifying where they are products can be found by scanning clothing with their smartphone cameras a la Google Lens.
Naver also touts its robust ad serving and payments infrastructure, claiming that Poshmark can use it to better analyze sales statistics and serve international customers. The long-term plan is to expand Poshmark’s business – with Naver’s support – into more developed markets in Asia and elsewhere where Naver has large business holdings, in part by integrating some of Naver’s live shopping services into its platform Poshmark. At the same time, Poshmark will build on Naver’s US presence, which includes digital comics portal Webtoon Entertainment and online story platform Wattpad.
Naver is optimistic that the acquisition could boost Poshmark’s annual sales by “over” 20% and save the company $30 million in annual run rates over two years.
Poshmark CEO Manish Chandra said in a press release:
The opportunity to join forces with Naver – one of the world’s leading, most innovative and most successful internet companies – is a testament to the strength of our brand, our operating model and what we have built over the past decade with our talented team and amazing community. Our industry is evolving at a rapid pace and we’re excited to continue to lead the future of shopping by providing our community with an unparalleled experience that’s simple, social, fun and sustainable. This is an extremely compelling opportunity for our people, who will benefit from being part of a larger, global organization with shared values and complementary strengths. This transaction also offers significant and immediate value for our shareholders. Longer term, as part of Naver, we will benefit from their financial resources, significant technological capabilities and leading presence across Asia to expand our platform, enhance our product and user experiences and expand into new and large markets. I look forward to partnering with Naver as we take our company into the next phase of growth.
Choi Soo-Yeon, CEO of Naver said:
The combination will create the most powerful platform to empower communities and reshape commerce. Poshmark is the definitive fashion brand in the United States, providing a social network for buying and selling clothing. Naver’s leading technology in search, AI recommendation and e-commerce tools will help power the next phase of Poshmark’s global growth. Poshmark is a perfect fit for our company – our two companies share common values and visions around content, community and empowerment. The combination of Naver and Poshmark immediately puts us at the forefront of creating a new socially responsible and sustainable shopping experience that caters to sellers of all sizes and interests – from individual and influencer sellers to professional sellers, brands and specialty boutiques – and a large, loyal and highly engaged social community. We look forward to working closely with Manish and his talented team to create lasting value for all of our stakeholders.
Poshmark’s exit comes over a decade after its founding in 2011. Chandra – along with Tracy Sun, Gautam Golwala and Chetan Pungaliya – founded the company in Chandra’s garage and funded it in part with proceeds from the sale of Chandra’s previous company, the Social Shopping startup Kaboodle. to Hearst. Prior to listing on Nasdaq with a valuation of over $3 billion, Poshmark raised more than $160 million in venture capital from VC firms including Temasek, Menlo Ventures, GGV Capital and Mayfield.
Poshmark claims to have over 80 million registered users.