Agreed Upon Transaction
After going public early last year, Poshmark (POSH) agreed to sell itself for less than half its IPO price. South Korean internet giant Naver will acquire the social shopping marketplace for $17.90 per share. In January of 2021, Poshmark priced its initial public offering at $42 per share.
The deal is expected to close in the first quarter of 2023, resulting in Poshmark becoming a standalone US subsidiary of Naver. After reaching a peak valuation of $7.3 billion on the day it went public, this transaction values Poshmark at around $1.6 billion, per FactSet.
A Social Shopping Marketplace
Poshmark was founded in 2011 and has since grown to 80 million registered users, according to the company’s internal data. That said, the site has a significantly smaller number of active users. This segment, which refers to people who bought or purchased items in the past 12 months, checked in at close to 8 million in Poshmark’s most recent quarter.
The company says it marries social media and sustainable commerce. Some of its competitors include eBay (EBAY), Etsy (ETSY), Facebook Marketplace (META), among others. Similar to these sites, Poshmark lets sellers post photos of their goods, which can receive comments and “likes” – hence the social shopping experience. As a third-party seller, the site collects fees on transactions but doesn’t store inventory.
Poshmark experienced growth as online shopping spiked during the pandemic, but sales slowed and losses widened this year.
Marrying Both Firms
Naver is a major search engine provider in South Korea, also operating the Line messaging app and digital comics. Last year it acquired Wattpad, a storytelling platform. During a press conference announcing the deal, Naver CEO Choi Soo-yeon projected growth in the customer-to-customer market in the coming years.
Poshmark offers its app in the US, Canada, Australia, and India. The deal gives Naver a stronger foothold in the US market and eliminates redundant costs. Consumers can expect to see more robust marketing campaigns supporting Poshmark, as well as the potential emergence of r new partnerships.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.