Etsy Buys Musical Online Marketplace Reverb

Etsy (ETSY) will acquire privately owned music-gear marketplace Reverb Holdings in a $275 million deal that will see the platform for buying and selling creative goods expand into a new branch through a company that it said already has a similar business model.

Sellers on Reverb, which was started in Chicago in 2013, include high-profile artists, dealers, individuals and brick-and-mortar retailers, Etsy said in a statement on Monday. Many users on Reverb are both buyers and sellers, with industry gear often bought and resold numerous times.

Esty’s stock was up 3% in afternoon trading.

Josh Silverman, Etsy’s chief exeuctive, said the companies have similar “levers of growth” including improvements to searching and discovery, making buying and selling earlier, and building a user community and brand.

“We have been successfully implementing these types of initiatives at Etsy for two years now, and are confident that we can similarly impact Reverb’s business,” Silverman said. “Reverb is the ‘Etsy’ of musical instruments, with significant competitive advantages, and we see tremendous value and untapped potential in the business.”

David Kalt, Reverb’s founder, said his company has “always found inspiration” in Etsy and he took confidence from the company when he set up his marketplace. But Kalt will “make a transition” and remain as CEO only until Etsy picks a new leader for the business.

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