South Korean internet giant Naver has agreed to buy Poshmark, a popular US-based thrift store, for $1.2 billion. It is Naver’s largest acquisition to date and a sign of the company’s wider global ambitions.
Sometimes referred to as “South Korea’s Google,” Naver is a broad Internet service provider that began as a search engine before expanding into email, messaging, news aggregation, and e-commerce. Its website and suite of mobile apps are some of South Korea’s most popular.
Naver’s acquisition of Poshmark gives the South Korean tech giant a significant foothold in the North American resale industry. The company had already expanded into Japan and other markets in the region, notably as the parent company, along with SoftBank, of the popular messaging app Line.
Naver has targeted beyond Asia. In 2021, it acquired its first North American business, Wattpad, a Toronto company that offers a platform for reading and writing original stories, for $600 million. In 2017, it acquired Xerox Research Center Europe, a France-based center focused on breakthroughs in artificial intelligence.
Choi Soo-Yeon, CEO of Naver, said the acquisition marks the company’s acceleration into the global “C2C” market, the category of businesses where customers sell goods and services to each other via a third-party platform such as eBay or Craigslist. She placed particular emphasis on fashion, which has seen a global surge in recent months and makes up 15 percent of South Korea’s e-commerce market.
Naver will pay $17.90 per share, 15 percent more than Poshmark’s closing price of $15.57 on Monday. Poshmark will continue to be led by its CEO, Manish Chandra.
Naver shares fell nearly 9 percent at the close of trading in Seoul on Tuesday. The company’s stock is down about 60 percent from its peak in mid-2021.
Big tech companies are focusing on the intersection of social media and e-commerce as a new growth path. With the success of short-form video and live streaming apps like TikTok, many are looking for new ways to channel social behavior into an in-app purchase.
Founded in 2011, Poshmark functions as a mix of Instagram and eBay. It allows users to post pictures of items for sale in a virtual “closet” from which others can make purchases. It is one of the biggest apps in a booming global resale market that is set to double in the next five years, according to a projection by ThredUp, a competitor.
The platform has over 80 million registered users, mostly in the US, Canada, Australia and India. In 2021, the company had $326 million in revenue, a 24 percent increase over the previous year, and a loss of $98 million.
With the agreement, Poshmark gets access to Naver’s extensive network of users and technology products. In a conference call, Mr. Chandra cited Naver’s technological prowess in areas such as live streaming and artificial intelligence as a reason for the sale.