Reverb, the Chicago-based online music gear marketplace, announced Monday that it is being acquired by Etsy for $275 million.
Etsy, the online marketplace for creative goods, is paying for Reverb in cash. When the deal closes later this year, Reverb will continue to operate as a standalone business.
Launched in 2013, Reverb has built an online marketplace where shoppers can buy and sell new, used and vintage music gear. The company raised $47 million in venture capital from investors such as serial entrepreneur Eric Lefkofsky, PayPal Founder Max Levchin and GE32 Capital. In 2018, the company reported revenue of $36 million.
Previously, Reverb Founder and CEO David Kalt publicly expressed his desire to take the company public. Now with the acquisition, he plans to eventually step down from the top role as soon as Etsy finds someone to replace him.
"In a short amount of time, we've built a community that musicians from all walks of life turn to for income to support their families, inspiration to fuel their passions, instruments to create new music, and so much more,” Kalt said in a statement. “We're excited to continue growing our marketplace, team, and community as part of Etsy.”
Before launching Reverb, Kalt founded optionsXpress, an online investing firm that sold to Charles Schwab for more than $1 billion. Once Kalt launched Reverb, the startup steadily grew. In 2017, Reverb launched Reverb LP, a marketplace where shoppers could browse, buy and sell records on the platform. The following year, Reverb moved into a new office in Roscoe Village. At the time, Reverb employed 170 people.
“With Etsy as our parent company, we’ll remain the marketplace built for the music community by a team of musicians and music lovers,” Kalt said in a blog post. “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. Think of it like going to see your all-time favorite band and getting a surprise sit-in from another musician you admire.”
By owning Reverb, Etsy says it can expand into a new vertical by offering music gear. Founded in 2005, the company went public in 2015. Etsy’s stock was up around 1.25% Monday morning.
“This transaction is a great strategic fit that firmly aligns with our mission of keeping commerce human,” said Etsy CEO Josh Silverman in a statement. “Reverb is the 'Etsy' of musical instruments, with significant competitive advantages, and we see tremendous value and untapped potential in the business."
