Naver to buy Poshmark at $1.6 bn to boost US e-commerce biz

Naver Corp. is set to take over US Poshmark Inc. for some $1.6 billion to make inroads into the e-commerce sector in North America as South Korea’s top online platform operator is seeking new businesses for future growth as the domestic market nears its saturation point.

Naver will acquire all of the issued and outstanding shares of Poshmark, a social e-commerce marketplace for new and secondhand styles for $17.9 a share in cash, making an enterprise value of approximately $1.2 billion. That represents a premium of 15% to the Nasdaq-listed company’s closing stock price of $15.57 as of Monday, according to both companies. The South Korean tech giant is also poised to assume $436 million of unrestricted cash on the balance sheet as of June 30.

“The combination accelerates Naver’s strategy to build a global e-commerce community portfolio to capture the growth in large markets around the world, including Poshmark’s home market of North America,” both companies said in a statement.

“This transaction provides Naver with an enhanced foothold in the US, expanding its international profile, which it has steadily increased both organically and through investments over the past 20 years.”

Naver aims to dominate the trading platform sector for individual users with similar interests within specific categories such as fashion, limited editions and luxury goods.

GO GLOBAL

Earlier this year, Naver unveiled a goal to attract 1 billion users worldwide and generate sales of 15 trillion won ($10.4 billion) in five years through active mergers and acquisitions. The company already grew several verticals in overseas markets such as the image messaging app Snow.

Naver’s overseas sales totaled 294.6 billion won in the first half, making up 7.6% of its total revenue. This more than doubled the previous year's 141.5 billion won, or 3.9% of total revenue. 

Naver Chief Executive Officer Choi Soo-yeon has pledged to raise the proportion of overseas sales to more than 20%.

Naver is already operating platforms for secondhand goods around the world – Kream in South Korea, Vintage City in Japan and the Vestiaire Collective in Europe.

COMMUNITY OF MORE THAN 80 MILLION REGISTERED USERS

Poshmark, founded in 2011, has communities of more than 80 million registered users across not only the US and Canada but also in Australia and India.

Naver and Poshmark agreed that a community based on similar interests is key to accelerating growth along with a deep understanding of the values and purchasing behavior of millennials and Gen Zers, collectively known as MZers, as well as investments in technology.

The two companies plan to enhance the collaboration of Naver’s entertainment and story businesses including Wattpad and Webtoon with Poshmark’s e-commerce business.

“The combination will create the strongest platform for powering communities and re-fashioning commerce,” Naver CEO Choi said. “Poshmark is the definitive brand for fashion in the United States, which provides a social network for buying and selling apparel. Naver’s leading technology in search, AI recommendation and e-commerce tools will help power the next phase of Poshmark’s global growth.”

Write to Seung-Woo Lee at leeswoo@hankyung.com
Jongwoo Cheon edited this article.