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South Korean search giant Naver today announced plans to acquire Poshmark for $1.2 billion in cash. The deal values publicly traded Poshmark shares at $17.90 — a 15% premium to today’s closing price — and the companies are expected to close in Q1 2023, subject to Poshmark shareholder approval and “satisfaction of certain customary closing conditions.”
Assuming the transaction goes through, Poshmark will become an independent entity of Naver, led by CEO Manish Chandra and Poshmark’s current management team. It will continue to operate under its current brand name, Naver says, and will retain its employees, user base and headquarters in Redwood City, California.
In a press release, Naver and Poshmark laid out several arguments for why the deal makes sense for both parties. By acquiring Poshmark, Naver plans to combine the service’s growing social shopping platform, where users can buy and sell used clothes, with its “technological prowess” and communities such as the online forum Naver Cafe. Poshmark leverages Naver’s image recognition and search technologies to enable its shopping platform to provide a new discovery and recommendation experience where users can search for clothes by searching for colors, designs and materials. Scanning clothes using their smartphone camera (a la Google Lens).
Naver completes a robust advertising service and payment infrastructure, which Poshmark can use to better analyze its sales statistics and serve global customers. The long-term plan, with Naver’s support, is to grow Poshmark’s business into more affluent markets in Asia and elsewhere where Naver has significant holdings – in part by combining some of Naver’s direct marketing services with Poshmark’s platform. At the same time, Poshmark will help Naver establish a stronger US foothold, including government-side assets that the tech giant already owns, such as digital comics portal Webtoon Entertainment and online story platform Wattpad.
Naver predicts the acquisition will increase Poshmark’s annual revenue by more than 20 percent and save the company $30 million in annual operating costs over a two-year period.
Poshmark CEO Manish Chandra said in a press release.
The opportunity to join forces with Naver – one of the world’s leading and most innovative and successful Internet companies – is a testament to the strength of our brand, our operating model and what we’ve built over the past ten years with our talented team and amazing community. . Our industry continues to evolve at a rapid pace, and we’re excited to continue to lead the future of marketing by providing our community with an unparalleled, simple, social, fun and sustainable experience. This is a compelling opportunity for our employees, who will benefit from being part of a large, global organization with shared values and complementary strengths. This transaction will provide significant and immediate value to our shareholders. Longer term, as part of Naver, we will benefit from their financial resources, significant technological capabilities and presence throughout Asia to expand our platform, enhance our product and user experiences, and enter new and larger markets. I look forward to partnering with Naver as we take our company to the next level of growth.
Naver CEO Choi Soo-yeon said:
Alliances create the strongest platform for empowering communities and reviving business. Poshmark is a fashion-forward brand that provides a social network for buying and selling clothing in the United States. Naver’s leading technology in search, AI recommendation and e-commerce tools will help fuel Poshmark’s next 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. Bringing Naver and Poshmark together puts us at the forefront of creating a new, socially responsible and sustainable shopping experience designed around sellers of all sizes and interests – from individual and influencer sellers to professional sellers, brands and specialty boutiques – and large, loyal and highly engaged. The existing social community. We are excited to work closely with Manish and his talented team to create sustainable value for all stakeholders.
Poshmark outlet in 2010 It has been more than ten years since its inception in 2011. Chandra – started the company in Chandra’s garage along with Tracy Sun, Gautam Golwala and Chetan Pungalia, partially funded by the proceeds from the sale of Chandra’s previous company, social marketing startup Kaboodle, to Hearst. Prior to its listing on Nasdaq at a valuation of more than $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. But despite that large customer base, the company has performed erratically in recent years, posting a $44.4 million loss for 2021 after posting a $25.2 million profit in 2020.
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