Etsy has confirmed a major acquisition.
The publicly traded e-commerce website has acquired online music marketplace Reverb for $275 million. The former company focuses primarily on the sale of handmade and vintage items as well as craft supplies.
Confirming the acquisition, Reverb Founder and CEO David Kalt praised Etsy’s decision.
“Reverb has always found inspiration in Etsy. Since our inception, we’ve admired their unwavering support of creative businesses and entrepreneurs, their values-driven approach to business, and their dedication to keeping commerce human (Not to mention, their appreciation for all things vintage.)”
In short, his company could only trust Etsy to “support and enhance [our] marketplace.”
Kalt first founded Reverb in 2013, closely working with local brick-and-mortar retailers, dealers, and artists. He launched the company after discovering buying and selling instruments online remained a “difficult and expensive” task.
In six years, the online music marketplace has reportedly raised $47 million. Investors have included Groupon co-founders Eric Lefkofsky and Brad Keywell, PayPal co-founder Max Levchin, Silicon Valley venture capitalist Roger McNamee, and Boston-based Summit Partners.
This represents David Kalt’s second successful sale. He previously sold online futures brokerage platform OptionsXpress for $1 billion.
The acquisition also marks Etsy’s second multi-million-dollar acquisition in the past three years. In 2016, the company paid $32.5 million to acquire Blackbird Technologies. The latter developed AI software centered around improving online shopping searches.
Etsy explained in a SEC filing,
“The Company completed this acquisition to improve the quality and relevance of search on Etsy.com.”
The company’s current purchase won’t officially close until the third or fourth fiscal quarter of this year. Following the acquisition, Reverb will continue operating as a standalone company.
In a statement about the recent purchase, Josh Silverman, Etsy’s CEO, explained,
“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.“
Featured image by Etsy.