The South Korean search giant Naver has agreed to acquire fashion marketplace Poshmark for $1.2 billion in cash. The deal values the company’s shares at $17.90, a 15% premium on yesterday’s closing price.
The two companies expect the deal to go through in Q1 2023 and if all goes smoothly Poshmark will become a standalone subsidiary of Naver, and remain at its headquarters in Redwood City, California.
Poshmark allows shoppers to buy clothes from the closets of other users, and went public in January 2021 at $42 a share. At the time online shopping was surging due to COVID-19 pandemic lockdowns, but since then the stock has fallen rapidly, alongside most of the tech industry.
Naver’s main offering is its search engine and e-commerce platform in South Korea. The deal will give Poshmark a foothold in international markets while boosting Naver’s reach in online retail.
“The combination will create the strongest platform for powering communities and re-fashioning commerce. Poshmark is the definitive brand for fashion in the U.S. that provides a social network for buying and selling apparel,” Naver CEO Choi Soo-Yeon said in a press release. “Naver’s leading technology in search, AI recommendation and e-commerce tools will help power the next phase of Poshmark’s global growth.”
The two companies said they expect the deal to generate “significant revenue and cost synergies” and predicted annual revenue growth of 20% in the short term.
This is the latest consolidation in the secondhand fashion market. Last year Etsy completed a $1.62 billion deal for Poshmark competitor Depop. Other companies in this space have struggled over a similar timeline. The RealReal shares are down 93% since its 2019 IPO, while ThredUp, which went public soon after Poshmark, has seen its shares fall 87%.