Etsy (NASDAQ:ETSY) has agreed to buy Reverb, which is an online marketplace that lists new and used musical instruments.
Here are seven things to be aware of as the deal moves forward:
- The acquisition will reportedly set Etsy back about $275 million in an all-cash deal.
- Reverb has been around since 2012 — when it was founded in Chicago — and it opens the door for anyone to buy and sell a number of instruments, notably guitars, amplifiers, drums, keyboards and more.
- This marks Etsy’s first purchase of a business since it brought in AI brand Blackbird in 2016.
- Reverb has raised about $50 million since it started. Backers include PayPal founder Max Levchin and former Twitter COO Adam Bain.
- The venture seems odd at first considering Etsy’s marketplace focuses more on small, crafted and handmade items, while Reverb gets its energy from the music scene. Nevertheless, both businesses connect with artists looking to sell their work or equipment, as well as consumers seeking to spruce up their life with art.
- “Reverb shares our mission, has a nearly identical business model, a strong brand in a large, fragmented market, and healthy growth dynamics,” per Etsy CFO Rachel Glaser.
- Meanwhile, Etsy has been on a positive tear lately as the business’ per-share price has increased by more than 100% over the last year. It has also gained more than 40% year-to-date.
ETSY shares are up about 2.5% on Monday off the heels of this move.
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