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The new round was led by OLX Group and included participation from existing OfferUp investors. OLX Group, Letgo’s majority investor, will own 40 percent of the combined businesses, according to a statement from the company.
“Our goal right now is to take the next few months to think through every detail on where we want to invest further,” OfferUp CEO Nick Huzar said in an interview with Crunchbase News. “Especially right now with what’s happening in the world, we want to be able to better support our local communities.”
Both OfferUp and Letgo are in the marketplace space, allowing users to buy and sell items in their local communities. Because the two companies were pretty aligned in what they do, but growing in different ways, it made sense to combine them, Huzar said. OfferUp’s mission is to be the “largest, simplest and most trustworthy local marketplace,” he said.
While buyers can meet with sellers to pick up items, OfferUp also has a shipping component. The company has seen a 30 to 40 percent increase in buying activity in its shipping business in the past week amid the COVID-19 pandemic.
OfferUp is based in the Seattle area, while Letgo is based in New York and has an office in Barcelona.
The acquisition is specific to the U.S. operations of Letgo, according to Huzar. He declined to disclose an acquisition price.
The deal, which is subject to approval by regulators, comes at a time of uncertainty with the U.S. dealing with the COVID-19 pandemic and looming recession. The paperwork was signed on Tuesday, according to Huzar, but acquisitions tend to take a while to process.
“Coming together with Letgo I think we’re really going to be able to help Americans right now with the things that they need,” he said.
OfferUp has more than $380 million in funding, according to the company. It’s backed by firms including Andreessen Horowitz, Tiger Global Management and GGV Capital. Letgo has $975 million in total funding, and last raised a $500 million Series E in August 2018, according to CrunchBase data.
Illustration Credit: Li-Anne Dias