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Wallapop and LetGo, two Craigslist rivals, plan merger to take on the U.S. market

TechCrunch TechCrunch 10/05/2016 Ingrid Lunden

Consolidation is afoot in the online classifieds space as two popular startups born in Barcelona are in advanced talks to merge operations in the U.S.. Wallapop and LetGo — which both provide platforms for consumers to post used items for sale and negotiate the sales offline — would like to combine their operations in the U.S. to scale up in competition against the likes of large incumbents like Craigslist and eBay, but also newer entrants into the same space, such as OfferUp, 5miles and Facebook’s Marketplace.

TechCrunch learned of the negotiations from sources close to the matter, and has confirmed it with further sources. We are also reaching out to Wallapop and LetGo for a comment. (And, while we were asking around for more information, we saw that Spanish publication Vanguardia also published news of this in the last hour.)

The companies have each both reportedly raised more than $100 million in funding to date. Wallapop — which has never publicly confirmed the amount it has raised, although our sources have said it’s at least $100 million — include Insight Venture Partners and Accel. OfferUp, meanwhile, is backed by South Africa’s Naspers, which also acquired a previous company from founder Alec Oxenford — the classifieds giant OLX. While both were founded in Barcelona, they have each found audiences in the U.S. market. LetGo calls New York its headquarters. Neither have disclosed user numbers but Wallapop reportedly has around 25 million downloads.

One of the reasons that the two are merging, our sources tell us, is to compete better against both the big incumbent players, but also the wave of other upstarts in this market that are capitalising on the fact that the biggest online classifieds company, Craigslist, has been very slow to innovate.

Key to that has been a mobile-first approach, giving users the classified experience in an app that is easy to browse and comes with geotagging and other localizing features.

They include smaller outfits like 5miles, which has picked up investment from companies like Alibaba. And also bigger names like OfferUp, which in November last year confirmed a $93 million raise and millions of customers.

And there are new plays from bigger and older players. They include Facebook Marketplace, which has been around forever but has quietly grown to be a threat, according to sources. Just the other week, Facebook moved to put a Marketplace link on the lower bar of its main Facebook mobile app — possibly it’s own mark of how it plans to go after this e-commerce market more aggressively.

In this context, it seems like a very interesting coincidence that just the other week, eBay decided to disclose that Close5 has passed 7 million downloads.

We have reached out to both companies and will update this post as we learn more.

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