Naver speeds up $1.6bn Poshmark purchase schedule by 3 months

[Source : Naver]

South Korean internet giant Naver Corp. will complete its $1.6 billion buyout of Poshmark, a U.S-based online marketplace for secondhand fashion goods, next month despite a controversy for overpaying for the acquisition and other challenges from tumbling stock price to growing market uncertainty.

Naver initially planned to complete its Poshmark buyout in April but it moved the schedule to early January, according to IT industry sources on Sunday.

Naver on Oct. 4 announced that it entered into a definitive agreement with Poshmark to acquire all of the issued and outstanding shares of Poshmark for $17.90 per share in cash. The $1.6 billion buyout was to cost 2.3 trillion won in Korean currency at the time but the cost has now come down to 2.096 trillion won, as of Dec. 16, as the Korean won has regained in value against the U.S. dollar.

Poshmark is a leading consumer-to-consumer e-commerce site in North America with 80 million registered users, made largely of young consumers. It was listed on Nasdaq in January 2021.

Naver is seeking to globally expand its C2C business through Poshmark. But its latest move has been criticized as too aggressive as market challenges grow amid worsening global economic outlook. Industry watchers also raised concerning about financing the deal due to rising interest rates and unfavorable foreign currency exchange rates. Poshmark this year is expected to report an operating loss greater than the $44 million registered last year.

Naver is grooming C2C platform business to lead its future growth of its mainstay business, e-commerce. C2C is a business model where customers purchase goods and services from other customers via a third-party platform.

The Korean internet giant invested 74.8 billion won ($54.5 million) in Singapore’s secondhand marketplace Carousell in 2020, and 155.0 billion won in Spain‘s top reseller platform Wallapop via venture capital firm Korelya Capital in February 2022. Excluding Poshmark, Naver has invested over 300 billion won in C2C firms at home and abroad, according to a Naver official.