Naver cofounder Lee Hae-jin.
South Korean billionaire Lee Hae-jin’s Naver, the country’s largest internet company by market capitalization, agreed to acquire American fashion e-commerce platform Poshmark for $1.2 billion, furthering the tech giant’s international expansion.
In the deal, Naver will purchase all of Poshmark’s shares for $17.90 in cash, a premium of 15% to its closing stock price the day before—but less than half the online retailer’s trading price of $42 during its IPO last January. Poshmark will become a standalone subsidiary of Naver while retaining its current management team, led by its founder and CEO Manish Chandra.
“Bringing Naver and Poshmark together will immediately put us at the forefront of creating a new, socially responsible, and sustainable shopping experience designed around sellers of all sizes and interests,” said Choi Soo-yeon, Naver’s CEO, in a statement.
Cofounded in 1999 by Lee and Kim Jung-ho, both former engineers from Samsung, Seongnam-based Naver hosts Korea’s largest search engine, also named Naver, and messaging platform Line. In the second quarter of 2022, the group reported operating revenues of 2 trillion won (about $1.4 billion), up 23% year-over-year. E-commerce plays a growing role in Naver’s growth, having generated 440 billion won in sales that quarter, a year-on-year increase of almost 20%.
Yet the Korean tech giant is looking to enhance its foothold in the U.S. as part of its international expansion, the company added in its statement. Naver’s properties outside of Korea include Los Angeles-based online graphic novel platform Webtoon Entertainment and Toronto-based Wattpad, an online literature and fanfiction website that Naver acquired in May last year for $600 million.
The acquisition is the biggest deal so far by Choi, 41, who in March this year became the youngest and the first woman to take the helm at Naver. In May, Choi announced that Naver aims to build a “global business ecosystem” across Japan, North America and Europe within the next five years, in order to double its annual sales to $12.2 billion and reach 1 billion monthly active users. The company claims it currently has an average of 700 million users, ranking above competitors like Kim Beom-su’s Kakao, the company behind Korea’s popular KakaoTalk messenger.
With Naver’s support, Poshmark will pursue a broader international expansion strategy in the medium-term, including into other developed markets in Asia. Founded in 2011, Poshmark’s app and website enable users to list either secondhand or new clothing items for sale, with the company taking a comission of 20% from any sale over $15. Like other resale platforms such as Depop and Japanese billionaire Shintaro Yamada’s Mercari, the platform supports messaging between users, along with “likes” and comments on items.