Dive Brief:
- Etsy will sell Reverb Holdings, its musical instrument marketplace, to a subsidiary owned by Reverb Partners, according to a Monday filing with the U.S. Securities and Exchange Commission.
- The transaction is expected to be completed within the coming months.
- The company said it is divesting from Reverb to concentrate more on its core Etsy marketplace and Depop, according to the filing.
Dive Insight:
Etsy said that the new owners of the music marketplace “share Reverb’s experience in the music industry and focus on supporting musicians.”
The decision to sell off its music marketplace comes nearly six years after it purchased the company for $275 million in cash.
In Etsy’s latest earnings, the company reported that Reverb generated $917.9 million in gross merchandise sales in 2024, down from $942.1 million from the year prior.
Bank of America analysts last week pointed to Reverb and Depop as elements that would help mitigate Etsy’s overall tariff exposure. Around 25% of Etsy products are sourced abroad, according to the analysts.
CEO Josh Silverman in a recent blog post encouraged Etsy shoppers to shop with sellers based in their own countries to circumvent tariffs. U.S. customers can choose from “more than 60 million items that ship domestically and we have thousands of sellers in every state,” he wrote.
Etsy has been trying to stand out among its competitors by removing inexpensive, mass-produced goods from its platform. As competitors like Amazon, Temu, Walmart, and Shein have gained market share, Silverman said the marketplace aims to distinguish itself from competitors by offering handcrafted goods.
“Most other players are competing head-to-head to sell the exact same merchandise, focused on selling at $0.02 cheaper or shipping it two hours faster, and this has resulted in the commoditization of the entire experience,” Silverman told analysts last year. “But that’s just not Etsy.”
