Etsy announced today it is acquiring Elo7, an online marketplace based in Brazil, for $217 million, subject to certain adjustments. Etsy CEO Josh Silverman said it will establish a foothold for Etsy in an underpenetrated ecommerce region.
Elo7 was founded in 2008 and is privately held, with 150 fulltime employees.
“Considered a leader in ‘custom and made-to-order’ merchandise in Brazil with strong local brand awareness, the Elo7 marketplace connects approximately 1.9 million active buyers with approximately 56,000 active sellers and currently has approximately 8 million items for sale, the majority of which are made to order. Elo7’s marketplace includes items from over 40 retail categories,” according to Monday’s press release.
Following the closing of the transaction, Elo7 will continue to be headquartered in Sāo Paulo, Brazil and operate as a standalone marketplace run by its existing leadership team.
Nevertheless, Etsy may see the acquisition as an opportunity to bring more inventory to more established markets in North America and Europe.
Etsy provided justification for the deal in a table in its press release titled, “Compelling Strategic Rationale.” One of its rationales was the following:
“Elo7 is expected to provide Etsy with a local brand in the fast growing Latin American market, where ecommerce penetration is <10%; and Brazil is the largest ecommerce market. The Latin American ecommerce market is projected to reach approximately $29 billion in 2021, with a 26% CAGR forecasted through 2024.”
Silverman called Elo7 the ‘Etsy of Brazil’ with a purpose and business model similar to Etsy’s. “Following our recent agreement to purchase Depop, we’re excited to bring another unique marketplace into the Etsy family.”
That was a reference to Etsy’s announcement earlier this month that it would acquire Depop for $1.625 billion in a primarily cash deal.