OfferUp Raises $120 Million And Buys letgo

By Amit Chowdhry ● March 26, 2020
  • OfferUp and letgo, two of the largest platforms for buying and selling locally, announced they are combining their U.S. businesses
  • And OfferUp also revealed it raised $120 million in an investment round led by OLX Group

OfferUp and letgo, two of the largest platforms for buying and selling locally, announced that they are combining their U.S. businesses. And OLX Group, the classifieds business of Prosus and the majority investor of letgo, will own 40% of the combined entity.

This combination is going to create a leading mobile marketplace for supporting over 20 million monthly active users with complementary product capabilities and a national footprint across the United States. And the agreement includes a new $120 million investment round led by OLX Group along with existing OfferUp investors, including Andreessen Horowitz and Warburg Pincus for supporting continued growth, product innovation, and monetization efforts.

OfferUp and letgo quickly grew in popularity due to innovations that make it easier for their communities to buy and sell. And both apps have been consistently ranked as top shopping apps in the App Store and Google Play Store.

OfferUp’s iOS and Android apps have been in the top 5 most popular shopping app lists for over 3 years. letgo’s free app has been downloaded over 100 million times and saw 400 million listings worldwide since it launched in 2015.

Now OfferUp and letgo users will have access to a larger network of buyers and sellers — which will significantly increase their trading opportunity. Plus users will also benefit from nationwide shipping and advanced trust and safety programs, and automotive dealers will have access to a meaningfully larger potential customer base.

This deal leaves the new company well-positioned to tap into a larger share of America’s significant online classifieds sector.

And the deal is subject to regulatory approval. And the combined businesses will be operated by OfferUp, which is based in Bellevue, Washington.

Allen & Company LLC is acting as financial adviser to OfferUp, and Perkins Coie LLP is acting as OfferUp’s legal advisers regarding the transaction. And OLX Group and letgo Global are advised by Cravath Swaine & Moore LLP and the management team and minority shareholders of letgo are advised by Morrison & Foerster LLP.

The Morrison & Foerster deal team was led by San Francisco corporate senior counsel John W. Campbell III and included corporate of counsel Jeffrey Washenko, M&A co-chair Graeme Sloan, tax partner Anthony J. Carbone and of counsel Dave B. Sturgeon, executive compensation partner Amanda Hines Gold, and technology transactions of counsel Anthony M. Ramirez.

Key Quotes:

“My vision for OfferUp has always been to build a company that helps people connect and prosper. We’re combining the complementary strengths of OfferUp and letgo in order to deliver an even better buying and selling experience for our communities. OLX Group has unparalleled expertise and clear success with growing online marketplace businesses, so they’ll be a great partner as we continue to build the widest, simplest, and most trustworthy experience for our customers.”

-OfferUp CEO Nick Huzar

“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. Bringing our apps together moves us much closer to that vision.”

-letgo cofounder Alec Oxenford.

letgo was founded by Alec Oxenford, Jordi Castello, and Enrique Linares.