Etsy is creating a presence for itself in a new vertical.
The handmade and vintage goods e-commerce retailer is acquiring Reverb Holdings Inc., a privately-held global online marketplace for new, used and vintage music gear, for $275 million in cash. Reverb, which will operate as a standalone business when the deal closes, was founded in Chicago in 2013.
Etsy intends to leverage its expertise to improve Reverb’s search and discovery, make selling and buying easier, and continue building its global brand and user community. Reverb's sellers are generally individuals, brick-and-mortar retailers, dealers of all sizes, and performing artists. The marketplace offers its sellers on-site product promotion and has a content-driven marketing strategy. Reverb's seller base shares several key markets with Etsy, such as the U.S., Canada, U.K., France, Germany, and Australia.
"Vibrant two-sided marketplaces are lightning in a bottle -- there are only a handful of them operating at scale -- and Reverb is one,” said Josh Silverman, CEO, Etsy. “This transaction is a great strategic fit that firmly aligns with our mission of keeping commerce human. Reverb is the 'Etsy' of musical instruments, with significant competitive advantages, and we see tremendous value and untapped potential in the business."
"We're excited to continue growing our marketplace, team, and community as part of Etsy,” said David Kalt, Reverb's founder and CEO. “We've always found inspiration in Etsy. In fact, the company gave me the confidence to launch Reverb when I saw the need for a musician's marketplace in 2013. Together, we'll continue to create a destination online where the music industry connects over the perfect piece of gear."
Kalt will continue to serve as CEO until Etsy identifies a new leader of the business. He will remain closely involved to provide leadership and support following the closing and then transition from the company. The transaction is currently expected to close in the late third quarter or early fourth quarter of 2019, subject to Hart-Scott-Rodino review and other customary closing conditions. Etsy plans to provide information on any impact to previously provided financial guidance following the completion of the transaction.