South Korea’s Naver Snags Poshmark Amid Stock’s Slump

By: James Flippin · October 05, 2022 · Reading Time: 3 minutes

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.

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