Poshmark sells itself to Naver amid market woes – The Ticker

E-commerce company Poshmark Inc. has agreed to acquire South Korean tech company Naver Corp for $1.2 billion. for sale.

Naver bought Poshmark for $17.90 per share. That’s 15% higher than Poshmark’s value of $15.57 earlier in the week, but that price is lower than when the company first went public at $42 per share.

Naver can be called “the Google of Korea”. Korea is one of three countries where Google is not the dominant search engine, the other two countries are China and Russia.

The company is home to the largest number of South Korea-based bloggers. It’s also home to the largest number of digital stories through services like Wattpad and Webtoon.

Wattpad is a Toronto-based company that provides a platform for reading and writing original stories. It was acquired by Naver on May 10, 2021 for $600 million. Webtoon is one of the largest webcomics communities in the world with many different genres available in over 30 different languages.

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When Poshmark was founded in 2011, it was advertised as “a mobile fashion marketplace built around real-time social experiences,” according to its website.

The company’s competition includes online marketplaces where people can buy used items, including eBay Inc., Etsy Inc., and ThredUp Inc.

Within a year, Poshmark gained over 1,000 users, who opened the app an average of 20 to 25 times a day, according to the Poshmark Seller Guide. As of 2020, the company has over 60 million users, including a mix of social buyers and sellers.

In the last 12 months, the number of active buyers was 7.6 million, according to a press release.

The deal between Poshmark and Naver was announced on October 3rd. The deal gives Poshmark access to Naver’s extensive network of users and technology products. Naver will enable South Korea to gain ground in the North American resale industry.

“The combination will create the most powerful platform to empower communities and reshape commerce,” said Choi Sooyeon, CEO of Naver, in a press release. “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.”

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With the acquisition, Naver also plans to support Poshmark in its marketing strategies and establish partnerships with the South Korean company’s own services.

To support this idea, Choi points to Weverse, an online marketplace that sells K-pop merchandise and allows fans to interact with idols.

The platform is jointly owned by HYBE Co. Much of the platform’s success and popularity stems from BTS, a South Korean boy band whose immense popularity immediately drew attention to the new platform. Fans flocked to the app for a chance to interact with the band.

Due to its increasing popularity, Weverse was eventually able to introduce western artists like Gracie Abrams and Max Schneider, who goes by the name “MAX”.

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Although the online shopping industry has thrived with the COVID-19 pandemic, Poshmark actually lost more money while revenue grew little.

After posting sales of $90.9 million in March, Poshmark’s sales fell to $89.1 million in June. The company forecast sales of between $85 million and $87 million in September, according to the Wall Street Journal.

Naver shares fell 9% at the close in Seoul after the deal was announced.

During a press conference, Choi expressed her confidence in the deal as she believes Poshmark will continue to grow in the future. Similar remarks were made by Manish Chandra, CEO of Poshmark.

“What will change is our ability to invest in the areas that will allow our community to thrive for the next decade and beyond,” Chandra said in part in a statement. “The future of fashion is in your closet, and I believe that future is brighter than ever.”

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