South Korean tech giant, Naver, has acquired US-based resale fashion platform Poshmark for US$ 1.6 billion as part of its expansion plan in North America.
The deal, expected to close by the first quarter of next year, includes all of the issued and outstanding shares of Poshmark, which represents an enterprise value of $1.2 billion. Under the agreement, Poshmark will be Naver’s standalone US subsidiary and will remain being led by CEO Manish Chandra and its current management team.
The South Korean tech firm said the acquisition will allow it to capitalise on the $80 billion re-commerce market in the US, which is expected to grow by 20 per cent annually to $130 billion by 2025.
“The combination will create the strongest platform for powering communities and re-fashioning commerce,” said Choi Soo-Yeon, CEO of Naver. “Poshmark is a natural fit for our business.”
“We will offer new experiences ranging from shopping, webtoon, and K-pop content to future customers, and create a new trend in the global customer-to-customer market.”
Meanwhile, Poshmark’s CEO Chandra said the deal will deliver significant and immediate value to the 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, elevate our product and user experiences, and enter new and large markets,” he said.
Primarily targeting millennials and Gen Z, Poshmark currently has a community of more than 80 million registered users in its home market. Last year, the company generated approximately $2 billion in gross merchandise value.
“Given the continued expansion of the resale market, it is unsurprising that a technology giant like Naver wants to get in on the action,” said Neil Saunders, MD at GlobalData, commenting on the deal.
“Unlike some of the attempts by foreign technology firms to enter the online retail market in the US, Naver’s approach is sound as it will occupy a niche that is not fully targeted by Amazon and will be able to grow via a brand that is established and is well regarded by consumers.
“The timing of the deal works well for Poshmark because, while the company is still growing its sales line, the bottom line remains under pressure. Given the expansion of rivals and the raft of new entrants to the resale market, Poshmark needs a strong financial backer to help it forge ahead. Naver provides this ballast both financially and in terms of technology and expertise.”
Before Poshmark, Naver invested in other pre-owned fashion marketplaces, including Kream in South Korea, Vestiaire Collective and Vintage City in Japan.