Etsy has made one of bigger decisions in their 15-year career acquiring musical instrument sellers Reverb. The acquisition confirmed at $275 marks Etsy’s entry into another new category.
This is one of the more expensive acquisitions from the New York-based Etsy. Their last deal came back in 2016 when they dolled out $32.5m for AI startup Blackbird.
Union of two fast-rising startups
Reverb started in 2012 as an e-seller and buyer specifically for musical instruments. The Chicago based company offers a platform for quick sale and purchase in the niche segment. Users can buy and sell everything from amps, keyboards, spare parts to guitars, drums etc.
Reverb has already raised around $50m in its short history. Its meteoric rise has found high profile backers like PayPal founder Max Levchin and former Twitter COO Adam Bain.
Etsy, on the other hand, is predominantly a platform for trading and purchasing handmade or other exclusive items. The company is also on a speedy rise with its share prices jettisoned to double over the course of the past year. Etsy reached its all-time high at $73 in March.
Etsy and Reverb meet at a common USP
Both the e-seller giants Etsy and Reverb have a common foundation for their contrasting segments. They connect buyers and sellers on an easy to access platform. Their USP is unique and exclusive goods and a part of Etsy’s strategy is to reunite the target audience.
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— Etsy (@Etsy) February 27, 2019
They will definitely capitalise on the common factors as part of their future strategy. Etsy CFO Rachel Glaser provided an insight into that.
“As we have said, our M&A strategy looks to put our capital to work in an opportunistic way — finding great businesses at the right value — and we believe Reverb is just that Reverb shares our mission, has a nearly identical business model, a strong brand in a large, fragmented market, and healthy growth dynamics.”
Etsy plans to let Reverb stand independently as a brand and its operations will more or less stay the same. That’s good news for the staff who might fear a complete makeover after December. Reverb founder David Kalt revealed that Etsy was a part of his plans since Reverb’s start.
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