South Korean internet conglomerate Naver will be acquiring all of Poshmark’s issued and outstanding shares for $17.90 in cash and foray into the US e-commerce market.
The CEO of Naver, Choi Soo-Yeon, said Naver will provide technological and AI-based support to accelerate Poshmark’s global outreach in this next chapter for the company.
“The combination will create the strongest platform for powering communities and re-fashioning commerce. Poshmark is the definitive brand for fashion in the United States that provides a social network for buying and selling apparel. Naver’s leading technology in search, AI recommendation and e-commerce tools will help power the next phase of Poshmark’s global growth,” said Soo-Yeon.
Manish Chandra, founder and CEO of Poshmark, remarked: “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, operating model, and what we’ve built over the last decade with our talented team and amazing community.”
He added: “This is a highly compelling 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, elevate our product and user experiences, and enter new and large markets. I look forward to partnering with Naver as we take our company into its next phase of growth.”
Poshmark said its primary demographic of millennials and Generation Z users is the largest shopping demographic for secondhand goods and a key driver of the circular economy and community-based platforms.
The deal will combine Poshmark’s shopping platform with Naver’s technology stack and AI-based capabilities, including its smart lens image recognition and search technologies. These capabilities are highly complementary to Poshmark’s product development strategy, and together will allow the e-commerce brand to offer a new search and shopping experience by integrating Naver’s shopping search engine.
This transaction is expected to generate significant revenue and cost synergies with re-acceleration of annual revenue growth beyond 20%, including approximately $30m in run-rate annual cost savings within 24 months post-closing.
The addition of Poshmark will expand and diversify Naver’s search-driven e-commerce business into the global secondhand consumer-to-consumer market for fashion. This partnership will also allow Naver to capitalise on the increasing consumer shift in fashion to online re-commerce, which according to Active Consulting, is an $80bn market today in the US alone, and is expected to grow by 20% annually to $130bn by 2025.
Naver said it will build on its existing US footprint, including its $600m acquisition of the North American online literature platform Wattpad in 2021.