Illustration: Aïda Amer/Axios
OfferUp, a Bellevue, Washington-based peer-to-peer marketplace for local goods, agreed to buy New York-based rival Letgo in an all-stock deal.
Why it matters: This is one of the few deals that was helped, not hurt, by the coronavirus pandemic. Sources say that the two companies had been discussing a tie-up for more than a year, but talks intensified as America's economy began shutting down — a crisis leading to compromise.
- OfferUp also raised $120 million of new funding led by Letgo majority investor OLX Group (the classifieds unit of Naspers), which will hold a 40% stake in the combined company. Existing OfferUp investors Andreessen Horowitz and Warburg Pincus also participated.
- Up & down: OfferUp CEO Nick Huzar tells Axios the transaction volume hasn't been too negatively affected over the past few weeks, but that the types of items sold have changed. For example, there have been massive spikes in the home/garden and video game categories, while things like jewelry have sagged.
The bottom line:
"The acquisition will see two of the largest third-party buying and selling marketplaces — outside of Craigslist, eBay and Facebook Marketplace, of course — become a more significant threat to the incumbents. Together, the new entity will have more than 20 million monthly active users across the U.S. For consumers, the deal means they’ll no longer have to list in as many apps when looking to unload some household items, electronics, furniture or whatever else they want to sell."— Sarah Perez, TechCrunch