Etsy is buying online music marketplace startup Reverb for $275 million
Etsy, the popular crafts-focused marketplace is acquiring Chicago-based online music-equipment marketplace startup Reverb for $275 million. Reverb will continue as a stand-alone company after the acquisition is complete. The transaction is currently expected to close in late third quarter or early fourth quarter of 2019, subject to customary closing conditions. Reverb, which will operate as a standalone business when the deal closes, will enable Etsy to expand into a new vertical, with a similar strategy and business model.
Founded six years ago by Chicago fintech entrepreneur David Kalt, Reverb is an online marketplace dedicated to buying and selling new, used, and vintage musical instruments, which leverages content, musician-focused eCommerce tools, a customer service team, and more. Reverb, which grew to $36 million in net revenue last year, had raised $47 million from a who’s who list of investors, including Groupon co-founders Eric Lefkofsky and Brad Keywell, PayPal co-founder Max Levchin, Silicon Valley VC Roger McNamee and Boston-based Summit Partners.
In a blog post, Reverb founder and CEO, David Kalt, said: “Today is an exciting day for the Reverb community: Earlier today, we announced that we signed an agreement to be acquired by Etsy. We expect the acquisition to close in the coming months. When it does, Reverb will remain a standalone business, but with the added support of Etsy—the global online marketplace for handmade and vintage items, with millions of buyers and sellers from nearly every country in the world.”
“Less than a decade ago, I was working as a guitar store owner and ran into a problem: Buying and selling instruments online was difficult and expensive. What started out as a simple solution—a two-way marketplace built for musicians by musicians—quickly grew into so much more. With your help, we’ve built a community that musicians from all walks of life turn to for income to support their families, inspiration to fuel their passions, tools to create new music, and more. But we’re far from finished,” Kalt added.
Founded in 2005 Chris Maguire, Haim Schoppik, Jared Tarbell, and Robert Kalin, Etsy is an e-commerce site and a smartphone application for buying and selling handmade and vintage items. Users can find products in the categories of clothing and accessories, jewelry, craft supplies and tools, weddings, entertainment, home and living, kids and babies, vintage, and more.