Etsy has signed a definitive agreement to acquire Reverb, the marketplace for new, used and vintage music gear for $275 million in cash.
The acquisition is still subject to certain adjustments with respect to cash, debt, working capital, transaction expenses and the value of equity awards granted in connection with the transaction.
Reverb made buying musical instruments easy and affordable
Reverb was founded in Chicago in 2013 on the principle that buying musical instruments should be easy and affordable. The marketplace’s sellers are generally individuals, brick and mortar retailers, dealers of all sizes, and high-profile artists.
The music gear industry is unique in that items are often bought and resold, numerous times.
Traditionally, musicians only had access to instruments they could find locally or on resale websites that weren’t tailored to the music industry.
Similarly, musical instrument retailers were often limited to regional customers and musicians had fewer options for reselling used gear.
Reverb created a destination for the global music community to come together online.
This gives sellers a global audience and musicians around the world access to more inventory and rare, highly-coveted items.
The result is a liquid marketplace that fosters a loyal and passionate user base. In fact, many Reverb users are both buyers and sellers.
“Vibrant two-sided marketplaces are lightning in a bottle – there are only a handful of them operating at scale – and Reverb is one. This transaction is a great strategic fit that firmly aligns with our mission of keeping commerce human. Reverb is the ‘Etsy’ of musical instruments, with significant competitive advantages, and we see tremendous value and untapped potential in the business.”
Josh Silverman, Etsy, CEO
New category for Etsy
Reverb enables Etsy to expand into a new vertical, with a company that has a similar strategy and business model. The unique marketplace built a strong brand in a large, fragmented market, with healthy growth dynamics.
“In a short amount of time, 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, instruments to create new music, and so much more. We’re excited to continue growing our marketplace, team, and community as part of Etsy. We’ve always found inspiration in Etsy. In fact, the company gave me the confidence to launch Reverb when I saw the need for a musician’s marketplace in 2013”
David Kalt, Reverb’s founder and CEO
The marketplace offers its sellers on-site product promotion and has a strong content-driven marketing strategy; it is in the early stages of leveraging its platform for additional revenue growth.
Reverb’s seller base spans many countries, with key markets including some of the same ones as Etsy, such as the US, Canada, UK, France, Germany and Australia.
The transaction is currently expected to close in late third quarter or early fourth quarter of 2019. Reverb will continue to operate as a standalone business when the deal closes.