Poshmark, an online customer-to-customer platform for the sale of secondhand fashion and accessories, including jewelry, was purchased for $1.2 billion by Naver, Korea’s Google.
The deal comes 21 months after the company went public with a $7.1 billion valuation.
Poshmark currently has 80 million registered users in the United States, Canada, Australia, and India, most of whom are millennials and Generation Z. And while its sales have seen healthy jumps—its net revenue for fiscal 2021 was $326 million, a 20% increase from the year before—it has struggled with profitability, recording a $98.3 million loss for the year.
Following the transaction, Poshmark will be a stand-alone subsidiary of Naver and remain in California. It will continue to be led by its current CEO, Manish Chandra, who founded the company in 2011, and its current management team.
A statement announcing the deal said that “online fashion re-commerce” is an $80 billion business in the United States, and it is expected to grow 20% annually to $130 billion by 2025.
“Poshmark is the definitive brand for fashion in the United States that provides a social network for buying and selling apparel,” said Soo Yeon Choi, CEO of Naver, in the statement. “Naver’s leading technology in search, AI recommendation, and e-commerce tools will help power the next phase of Poshmark’s global growth.”
According to The New York Times, this is the largest purchase in Naver’s history. It is considered the largest technology company in South Korea, and it also has a presence in Japan.
Naver is purchasing the company for $17.90 a share, which represents a 15% premium to Poshmark’s closing price as of Oct. 3. Still, that is far less than its original IPO price of $42 a share, not to mention its kickoff trading price of $97.50.
The deal, which is subject to shareholder and other approval, is expected to be completed in the first quarter of 2023.
Photo courtesy of Poshmark
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