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Etsy (ETSY) to Acquire Elo7 to Expand Marketplace Offerings
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In a bid to strengthen e-commerce capabilities, Etsy (ETSY - Free Report) has entered a definitive agreement to acquire Brazil-based Elo7 for $217 million in cash.
Notably, Elo7 operates an online marketplace for handmade items under 40 retail categories. The most popular categories on the marketplace are special events and life moments like weddings, children's parties, baby and home decor.
Further, there are 1.9 million active buyers and around 56,000 active sellers on the marketplace at present.
The Elo7 buyout is expected to be completed in third-quarter 2021. The acquisition is expected to be accretive.
On the completion of the deal, Etsy’s marketplace offerings will expand, which, in turn, will likely aid it in gaining customer momentum further.
The latest move is likely to aid Etsy in gaining a strong footprint in the e-commerce market, which,per a report from Grand View Research, is expected to witness a CAGR of 14.7% between 2020 and 2027.
Further, an eMarketer report indicates that the worldwide e-commerce market is expected to generate sales worth $4.9 trillion in 2021, $5.4 trillion in 2022, $5.9 trillion in 2023 and $6.4 trillion in 2024.
Moreover, Etsy is likely to get good exposure to Brazil’s booming e-commerce market on the back of Elo7.
As per the data from ecommerceDB, the e-commerce market of Brazil is expected to witness a CAGR of 9% between 2020 and2024.
We believe that Etsy is well-poised to capitalize on the immense growth prospects present in Brazil’s online retail space on the back of a strong seller and buyer base on Elo7’s marketplace.
Growing Efforts
The latest move bodes well for Etsy’s strengthening endeavors toward bolstering its marketplace business.
Apart from the Elo7 acquisition agreement, the company has recently entered an agreement to acquire Depop, a provider of a resale fashion marketplace, for $1.6 billion. The deal is also expected to be completed in third-quarter 2021.
Further, with Depop, the company remains well-poised to capitalize on the growth prospects present in the second-hand market, which is likely to seea CAGR of 39% between 2019 and 2024.
Upon the closing of the recent deals, Etsy’s marketplace business will comprise Etsy, Reverb, Depop and Elo7.
We note that Etsy’s marketplace business remains the key growth driver. The company is continuously benefiting from accelerating Marketplace revenues. Solid momentum across active sellers and buyers remains a major positive. Additionally, the company’s expanding collection of unique items is another positive.
All the factors will likely continue to shape up the company’s growth trajectory in the near term as well as in the long haul.
Long-term earnings growth rates for Synopsys, Marchex and Benefitfocus are currently pegged at 14.65%, 30% and 15%, respectively.
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Etsy (ETSY) to Acquire Elo7 to Expand Marketplace Offerings
In a bid to strengthen e-commerce capabilities, Etsy (ETSY - Free Report) has entered a definitive agreement to acquire Brazil-based Elo7 for $217 million in cash.
Notably, Elo7 operates an online marketplace for handmade items under 40 retail categories. The most popular categories on the marketplace are special events and life moments like weddings, children's parties, baby and home decor.
Further, there are 1.9 million active buyers and around 56,000 active sellers on the marketplace at present.
The Elo7 buyout is expected to be completed in third-quarter 2021. The acquisition is expected to be accretive.
On the completion of the deal, Etsy’s marketplace offerings will expand, which, in turn, will likely aid it in gaining customer momentum further.
Etsy, Inc. Price and Consensus
Etsy, Inc. price-consensus-chart | Etsy, Inc. Quote
Buyout Holds Promise
The latest move is likely to aid Etsy in gaining a strong footprint in the e-commerce market, which,per a report from Grand View Research, is expected to witness a CAGR of 14.7% between 2020 and 2027.
Further, an eMarketer report indicates that the worldwide e-commerce market is expected to generate sales worth $4.9 trillion in 2021, $5.4 trillion in 2022, $5.9 trillion in 2023 and $6.4 trillion in 2024.
Moreover, Etsy is likely to get good exposure to Brazil’s booming e-commerce market on the back of Elo7.
As per the data from ecommerceDB, the e-commerce market of Brazil is expected to witness a CAGR of 9% between 2020 and2024.
We believe that Etsy is well-poised to capitalize on the immense growth prospects present in Brazil’s online retail space on the back of a strong seller and buyer base on Elo7’s marketplace.
Growing Efforts
The latest move bodes well for Etsy’s strengthening endeavors toward bolstering its marketplace business.
Apart from the Elo7 acquisition agreement, the company has recently entered an agreement to acquire Depop, a provider of a resale fashion marketplace, for $1.6 billion. The deal is also expected to be completed in third-quarter 2021.
Further, with Depop, the company remains well-poised to capitalize on the growth prospects present in the second-hand market, which is likely to seea CAGR of 39% between 2019 and 2024.
Upon the closing of the recent deals, Etsy’s marketplace business will comprise Etsy, Reverb, Depop and Elo7.
We note that Etsy’s marketplace business remains the key growth driver. The company is continuously benefiting from accelerating Marketplace revenues. Solid momentum across active sellers and buyers remains a major positive. Additionally, the company’s expanding collection of unique items is another positive.
All the factors will likely continue to shape up the company’s growth trajectory in the near term as well as in the long haul.
Zacks Rank & Key Picks
Etsy currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Synopsys, Inc. (SNPS - Free Report) , Marchex, Inc. (MCHX - Free Report) and Benefitfocus, Inc. , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rates for Synopsys, Marchex and Benefitfocus are currently pegged at 14.65%, 30% and 15%, respectively.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>