South Korea’s Naver to acquire US fashion social commerce Poshmark for US$1.6b

SOUTH Korean tech firm Naver said on Tuesday (Oct 4) it agreed to a US$1.6 billion deal to buy Poshmark, a US apparel resale platform firm, as a strategic investment to enter the US e-commerce market.

Naver will acquire all of the issued and outstanding shares of Poshmark for US$17.90 in cash. The deal is expected to close in the first quarter of next year.

The US$1.6 billion includes consideration for Poshmark’s cash holdings, and the enterprise value of Poshmark is about US$1.2 billion, a Naver spokesperson said.

Poshmark is the largest fashion consumer-to-consumer platform in North America, with 80 million registered users led by Millenial and Gen Z active users, Naver and Poshmark said in a conference call about the deal.

The deal will combine Poshmark’s shopping platform with Naver’s technology including image recognition, artificial intelligence and live streaming, a key driver of e-commerce in South Korea, the companies said in a statement.

The companies plan to target a US$80 billion market in online fashion “re-commerce” in the US, which is expected to grow by 20 per cent annually to US$130 billion by 2025, according to Activate Consulting.

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Poshmark shares jumped 14 per cent to US$17.8 in after-hours trading on Monday. However, shares in Naver fell 5.2 per cent as of 1.20 am GMT, versus a rise of 2.3 per cent in the wider market.

Naver acquired North American online literature platform Wattpad for about US$600 million last year. REUTERS