It’s a big day for OfferUp.
The Bellevue, Wash.-based mobile marketplace startup today announced a $120 million funding round and an agreement to acquire Letgo, a rival commerce app that also lets people buy and sell used goods.
OLX Group, the online classifieds business of Prosus, led the investment round; the Netherlands-based firm was already a majority investor of Letgo. It will own 40 percent of the new combined entity once the deal is approved by regulators.
Existing OfferUp investors Andreessen Horowitz and Warburg Pincus also participated in the investment round, which brings total funding to date for OfferUp to $380 million.
The company declined to disclose its valuation; it was valued at $1.4 billion after its most recent funding round in August 2018, according to PitchBook.
“My vision for OfferUp has always been to build a company that helps people connect and prosper,” OfferUp CEO Nick Huzar said in a blog post. “Bringing together the strengths and resources of OfferUp and letgo is an incredible opportunity that will help us reach our goal of creating the largest, simplest, and most trustworthy marketplace for local buyers and sellers.”
OfferUp and Letgo plan to merge their marketplaces with a combined U.S. customer base of more than 20 million monthly active users. OfferUp will operate the combined businesses; Huzar will continue as CEO and chairman.
Letgo’s business outside of North America will be separately owned and operated as part of OLX Group. Letgo had raised $975 million after reeling in a $500 million round in 2018. The 5-year-old startup is based in New York City and employs more than 300 people, according to LinkedIn.
“letgo and OfferUp have always shared the same core vision for how large America’s secondhand economy can become – harnessing tech innovation to bring about an extraordinarily positive impact on consumers’ wallets and also on the environment,” Letgo co-founder Alec Oxenford said in a statement. “Bringing our apps together moves us much closer to that vision.”
OfferUp, founded in 2011 and ranked No. 14 on the GeekWire 200, has 280 employees in Bellevue and Miami. Huzar, a former DealSpringer CEO and T-Mobile product manager, was inspired to launch the company after looking at all the items around his home after the birth of his daughter. He co-founded the company with Arean van Veelen.
OfferUp competes with Craigslist, eBay, Facebook, and other marketplace apps.
In his blog post, Huzar noted the COVID-19 crisis.
“I want to acknowledge that the world is upside down right now,” Huzar said. “This pandemic is affecting all of us, our employees, our partners, and our community members and will continue to do so for some time. For nearly ten years, OfferUp has strived to maintain a safe, happy, and healthy community — both in-person and online — for buyers, sellers. This news helps us to continue to innovate and grow, in spite of these challenging times, and continue to deliver on that promise.”
OfferUp said buying activity for products people use at home has increased significantly amid the COVID-19 outbreak. There are also more buyers using nationwide shipping.
Business Insider reported last week that OfferUp removed hand sanitizer; toilet paper; protective masks; and disinfecting products from its platform last week to discourage price gouging. Amazon is also dealing with the same problem; it has removed more than 500,000 offers from its marketplace due to coronavirus-based price gouging.