By Joyce Lee
SEOUL – South Korean tech firm Naver Corp said on Tuesday it had agreed to a $1.6 billion deal to buy Poshmark Inc, a U.S. apparel resale platform company, as a strategic investment to enter the the US e-commerce market.
Naver will acquire all of the issued and outstanding shares of Poshmark for $17.90 in cash. The deal is expected to close in the first quarter of next year.
The $1.6 billion includes Poshmark’s cash consideration, and Poshmark’s enterprise value is about $1.2 billion, a Naver spokesperson said.
Poshmark is the largest consumer-to-consumer fashion platform in North America, with 80 million registered users led by active Gen Z and Gen Z users, Naver and Poshmark said on a conference call on the agreement.
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 press release.
The companies plan to target an $80 billion market in online fashion “re-commerce” in the United States, which is expected to grow 20% annually to reach $130 billion by 2025, according to Activate Consulting.
Shares of Poshmark jumped 14% to $17.8 in after-hours trading on Monday. However, Naver shares fell 5.2% from 0120 GMTagainst a rise of 2.3% on the whole market.
Naver acquired North American online literature platform Wattpad for around $600 million last year.