The acquire of Elo7 by Etsy makes us understand the value and power of handcrafts: 217 million dollars in cash. Leader in the Brazilian market in unique handmade items, the Elo7 platform – founded in 2008 – is one of the 10 main e-commerce platforms in Brazil and is projected to grow by 26% by 2024.
On the other hand, the American company founded in 2005 and based in Brooklyn, New York, operates online marketplaces that connect millions of buyers and sellers with passionate and creative people around the world. Etsy has already bought other local marketplace giants like Reverb, from Chicago, and Depop, from London.
1. Why was Etsy interested in buying Elo7?
Considered a leader in ‘custom and made-to-order’ merchandise in Brazil, Elo7 connects approximately 1.9 million buyers with 56,000 sellers. Currently, the platform has around 8 million items for sale, most of which are craft by order.
Elo7 marketplace features items from more than 40 retail categories. In this sense, 50% of sales are from categories of “special events and moments of life” such as weddings, babies, home decor and children’s parties.
According to Etsy CEO, Josh Silverman, the two companies have very similar purposes and business models. In addition, he said that the purchase is key for the American platform to establish bases in Latin America, where the brand does not have many customers yet.
Likewise, the CEO of Elo7, Carlos Eduardo Curioni commented that Etsy has always been a source of inspiration for the Brazilian platform and that it intends to use its experience to leverage the Etsy market in Brazil.
2. What is going to change in the Brazilian handcrafts market?
After the closing of the transaction – which is currently expected to be completed during the third quarter of 2021 – Elo7 will remain operating as standalone. In other words, it will remain headquartered in São Paulo and will operate as an independent market managed by its local team.
Josh Silverman argues that Reverb, Depop, and Elo7 are companies that “share similar growth levers, including enhancing search, discovering and building human connections, and facilitating sales and purchases.”
Thus, both markets will operate independently, while benefiting from a shared experience in product, marketing, technology and customer support, concludes Silverman.
The full release of the purchase – available in English only – can be accessed here. According Terra, a Brazilian newspaper, Etsy shares rose 5.4% after the announcement.
Finally, I want to know: do you want to be part of our team and be an activist in favor of artisan work? Briselier, my handmade startup, have a Blog just about the subject check it out here.