South Korean tech company Naver Corp has made a deal to acquire Poshmark Inc, a well-known apparel resale platform in the U.S., for $1.6 billion. Naver sees this as a strategic investment that will allow them to enter the competitive e-commerce market in the U.S.

The agreement includes Poshmark’s cash holdings, with the overall value of the company estimated at around $1.2 billion. Naver will take control of all the shares of Poshmark, paying $17.90 per share in cash. The acquisition is set to be finalized in the first quarter of next year.

Poshmark is the leading platform for consumers to resell fashion items in North America, with 80 million registered users, particularly popular among Millennials and Gen Z. This acquisition will combine Poshmark’s successful shopping platform with Naver’s advanced technology, such as image recognition, artificial intelligence, and live streaming, which have played a crucial role in the growth of e-commerce in South Korea.

Both companies recognize the lucrative opportunity in the U.S. online fashion resale market, which is projected to reach a value of $80 billion. Experts anticipate the market to grow at a rate of 20% annually, reaching $130 billion by 2025, according to Activate Consulting.

After the announcement, Poshmark’s shares saw a 14% surge in after-hours trading on Monday, rising to $17.8. However, Naver’s shares experienced a 5.2% decline as of 0120 GMT, while the wider market rose by 2.3%.

This is not Naver’s first foray into the North American market. In the previous year, the tech giant acquired Wattpad, an online literature platform, for approximately $600 million. Naver’s consistent expansion into new regions and industries highlights its commitment to establishing a global presence and leading in technological innovation.

The acquisition of Poshmark by Naver is a significant milestone for both companies and has the potential to reshape the e-commerce landscape in the U.S. As the fashion resale market continues to thrive, driven by consumer demand for sustainable and affordable options, the collaboration between Naver and Poshmark could bring exciting new developments to the industry.

Useful links:
1. Poshmark website
2. Naver Corp website