E-commerce company Poshmark Inc. has agreed to sell itself to South Korean tech firm Naver Corp. for $1.2 billion.

Naver bought Poshmark for $17.90 per share. That’s 15% higher than Poshmark’s value of $15.57 at the start of the week, but that price is below its value when the company first went public at $42 per share.

Naver can be considered “the Google of Korea”. Korea is one of three countries where Google is not the dominant search engine, the other two countries being China and Russia.

The company is home to the largest number of bloggers based in South Korea. It is also home to the largest number of digital stories through services such as Wattpad and Webtoon.

Wattpad is a Toronto-based company that offers a platform to read and write original stories. It was acquired by Naver for $600 million on May 10, 2021. Webtoon is one of the largest webcomic communities in the world, with many different genres available in over 30 different languages.

When Poshmark was founded in 2011, it was billed as “a mobile fashion marketplace built around real-time social experiences,” according to its website.

The company’s competition includes online marketplaces that let people buy used items, including eBay Inc., Etsy Inc., and ThredUp Inc.

Within a year, Poshmark attracted more than 1,000 users who would open the app an average of 20 to 25 times per day, according to the Poshmark Seller Guide. As of 2020, the company has over 60 million users, containing a mix of social buyers and sellers.

Over the past 12 months, the number of active buyers was 7.6 million, according to a press release.

The deal between Poshmark and Naver was announced on October 3. With this agreement, Poshmark will have access to Naver’s extensive network of users and technology products. Naver will allow South Korea to gain ground in the resale industry in North America.

“The combination will create the strongest platform to power communities and reshape commerce,” Naver CEO Choi Sooyeon said in a press release. “Poshmark is America’s definitive fashion brand that provides a social network to buy and sell clothes. Naver’s cutting-edge technology in search, AI recommendation and e-commerce tools will help fuel the next phase of Poshmark’s global growth. »

With this acquisition, Naver also plans to help Poshmark with its marketing strategies and establish partnerships with the South Korean company’s own services.

To reinforce this idea, Choi points to Weverse, an online marketplace that sells K-pop merchandise and allows fans to interact with idols.

The platform is jointly owned by HYBE Co. Much of the platform’s success and popularity comes from BTS, a South Korean boy group whose immense popularity immediately drew attention to the news. platform. Fans flocked to the app for the opportunity to interact with the band.

Due to its growing popularity, Weverse was eventually able to feature Western artists such as Gracie Abrams and Max Schneider, who goes by the name “MAX”.

Although the online shopping industry has thrived with the COVID-19 pandemic, Poshmark has actually lost more money as revenue has grown little.

After Poshmark made $90.9 million in revenue in March, its revenue fell to $89.1 million in June. The company expected revenue to be between $85 million and $87 million in September, according to The Wall Street Journal.

Naver shares fell 9% at the close of trade in Seoul after the deal was announced.

At a press conference, Choi expressed her confidence in the deal, as she believes Poshmark will continue to grow in the future. Similar remarks were made by Poshmark CEO Manish Chandra.

“What will change is our ability to invest in the areas that will enable our community to thrive over the next decade and beyond,” Chandra said in part in a statement. “The future of fashion is in your closet, and I believe that future is brighter than ever.”