Etsy is acquiring music-gear marketplace Reverb for $275 million in cash. In announcing the news, Reverb founder and CEO David Kalt said Reverb would remain a standalone business, but with the added support of Etsy. “Your ability to buy, sell, learn, and connect on Reverb will not change. At the same time, we’ll have added resources to continue growing and improving the Reverb community.”
Greg Holden interviewed Kalt in 2015 for a profile of Reverb in EcommerceBytes Update, which provides a sense of what makes the marketplace different from others. Holden had written: “Kalt launched Reverb in January 2013 with the goal of creating a better resource for buyers and sellers, including himself: lower fees, more accurate listings, and lots of content to help musicians research products and brands.”
An Etsy spokesperson told EcommerceBytes, “Etsy’s had tremendous success in growing its own marketplace (including roughly doubling GMS growth, revenue growth, and profit margins) since Josh Silverman took over as CEO in 2017. So Etsy is well positioned to pull from its own playbook in order to lead Reverb in its next chapter.”
In Etsy’s announcement, Silverman pointed to what he called levers of growth, “such as improving search and discovery, making selling and buying easier, and building a global brand and user community.”
For hints as to what might come at Reverb, take a look at Silverman’s changes to Etsy: he has raised fees, pushed free shipping, and moved to an auto-renew listing model (which goes into effect on Thursday).
Advertising has become a focus of many peer marketplaces – it’s possible Silverman sees cross-platform ad opportunities that could boost revenue on both platforms.
And in 2018, Etsy moved to the cloud using Google technology. If Reverb is currently saddled with hosting its own servers, it could be one of the motivations for the sale.
Etsy said the transaction is expected to close in late third quarter or early fourth quarter of 2019, subject to Hart-Scott-Rodino review and other customary closing conditions.