Reverb.com

Reverb.com is an online marketplace for new, used, and vintage music gear. The website was founded in 2013 by David Kalt shortly after he purchased music instrument store Chicago Music Exchange and became frustrated with then-available options for buying and selling guitars online.[1] It has grown into a multimillion-dollar business[1] with more than 10 million monthly visitors[2] and $47 million in funding.[3]

Reverb.com
Private
IndustryMusical instruments
Founded2013 (2013)
FounderDavid Kalt
Headquarters
Chicago, Illinois
,
U.S.
Number of employees
135 (2017)
ParentEtsy
Websitereverb.com

The website allows anyone to create free listings for musical instruments and other related equipment. The site also has sold gear from popular artists such as Maroon 5,[4] Wilco,[5] Green Day,[6] Billy Corgan,[7] and Ray Lamontagne.[8] The site has roughly half a million listings of music-related gear.

To help users determine market values for instruments, Reverb.com provides a price guide of real-time transactional data. The company offers iPhone and Android apps, which include the site's main features, and as of 2017 has on-the-ground support in the UK, The Netherlands, Australia, Germany, France, and Japan.[9] In late 2017, the company launched Reverb LP,[10] an online marketplace for LPs and other physical music, and the Reverb Foundation,[11] a non-profit supporting programs and initiatives that increase access to music education, gear, and opportunities to play.

In August 2019, Reverb.com was acquired by Etsy for $275 million in cash.[12]

History

David Kalt created Reverb shortly after purchasing a guitar store, Chicago Music Exchange. While working to find unique vintage guitars online for his shop and to sell gear online for extra revenue, he found that available options were cumbersome, expensive, and not tailored for musicians and the nuances that come with buying and selling music gear.[13] Kalt still owns the Chicago Music Exchange, but has hired a CEO for the store so that he could focus his efforts on Reverb.[14]

Funding

In November 2013, Reverb secured[15] $2.3 million in funding from investors including Cheap Trick's Rick Nielsen, Lightbank co-founders Brad Keywell and Eric Lefkofsky, David Lowery of Cracker and Camper van Beethoven, Silicon Valley entrepreneur Eric Ries, and country music star Brad Paisley.[16] The company raised another $4.2 million in January 2015 before announcing an additional $25 million led by global growth equity investor Summit Partners in December of the same year.[16]

In August 2017, the company announced another $15 million in funding from 65 investors, including PayPal co-founder Max Levchin, Silicon Valley investor Roger McNamee, former Twitter COO Adam Bain, and Jon Oringer, CEO of Shutterstock,[3] who said, “As a regular user of Reverb.com, I am witnessing first-hand the positive impact that the company is having on musicians and the way instruments are bought and sold. I’m excited to support not only a successful marketplace—as that business model has proven itself powerful—but a company that’s uplifting an entire industry.”[2]

Including seed funding, the latest round brings Reverb's total funding to $47 million.

Growth and international expansion

In August 2017, Reverb was named No. 18 on the Inc 5000 list of fastest-growing private companies, with 12,327 percent three-year growth (2013–2016.)[14] In 2016, the company generated $16 million in revenue and supported $240 million in sales of new and used gear through its platform.[17] As of December 2017, the company anticipated closing out the year with close to $400 million in sales.[18] In August 2016, Reverb hired its first on-the-ground employees in the UK, France, and Australia.[19] In the same month, the company launched its mobile app outside of North America. Within a year of its expansion into Europe, the company grew its users in the region by 700 percent and its sales in the region by 300 percent. As of 2017, the company has additional team members in Germany and Japan.[20]

Acquisition by Etsy

On August 15, 2019, Etsy completed the acquisition of Reverb.com for $275 million in cash, subject to certain adjustments with respect to cash, working capital, transaction expenses, and the value of equity awards granted in connection with the transaction.

Josh Silverman, Chief Executive Officer of Etsy, commented, "We are excited to officially welcome Reverb's employees and the entire Reverb community to Etsy. We see significant potential in the Reverb marketplace and look forward to supporting them as they enable more and more music lovers around the world to buy, sell, connect, and learn. It is our goal to unlock further value in what is already a strong and vibrant business with key competitive differentiation."

Business model

Reverb charges a 3.5% commission fee to the seller and a small percent for credit card processing.[21] Kalt said, “When we started Reverb.com, musicians were getting 50¢ on the dollar when they sold something and paying 100¢ on the dollar when they bought something. By cutting fees and offering more information about comparable sales, we've narrowed that gap—and gotten millions more instruments on sale."[14]

Another factor in the company's success is its live customer service team, and that roughly 85 percent of employees are musicians.[22] Dave Depper, touring guitarist for Death Cab for Cutie, said, "My experience has been 100 percent positive. You can just tell it's run by people who are musicians or who care about musicians' experience."[22] Depper also cited the website's community feel as a positive, and that he is able to buy an instrument before a tour and sell it for about the same price after.

The company also provides informative content such as demo videos and how-to articles to drive traffic to the website.[23]

Artist Shops

In addition to shops from individuals and dealers, Reverb has hosted gear sales for a number of notable artists. To date, Reverb Artist Shops have included sales from:

References
  1. "How an Entrepreneur's Frustrations Created an eBay for Music Gear Marketplace". inc.com. Retrieved January 15, 2018.
  2. "Chicago's music gear darling nabs another $15M". Built In Chicago. Retrieved January 15, 2018.
  3. "Reverb.com raises another $15 million". chicagobusiness.com. Retrieved January 15, 2018.
  4. Pedrosa, Marina (August 29, 2018). "Maroon 5 to Sell Massive Batch Of Musical Gear On Reverb". Billboard. Retrieved June 8, 2020.
  5. "You Can Now Buy Wilco's Old Instruments, Gear, Test Pressings, More - Pitchfork". Pitchfork. Retrieved January 15, 2018.
  6. "Billie Joe Armstrong is selling pieces of Green Day history - News - Alternative Press". Alternative Press. Retrieved January 15, 2018.
  7. "Billy Corgan to Sell Guitars, Amps Used on Smashing Pumpkins Albums". Rolling Stone. Retrieved January 15, 2018.
  8. "Ray LaMontagne Launches Shop Where You Can Buy His Guitars, Amps, Etc". Paste. Retrieved January 15, 2018.
  9. "Music Inc. Magazine — November 2017 Digital Edition". musicincmag.com. Retrieved January 15, 2018.
  10. "Discogs meets Match.com on Reverb's new online vinyl marketplace". thevinylfactory.com. December 13, 2017. Retrieved January 15, 2018.
  11. Wissmuller, Christian. "MMR magazine - Reverb Launches the Reverb Foundation". mmrmagazine.com. Retrieved January 15, 2018.
  12. "Etsy Completes Acquisition of Reverb, a Leading Online Marketplace for New, Used and Vintage Musical Instruments". investors.etsy.com. Retrieved November 27, 2019.
  13. "Five Minutes With...The Founder/CEO Of Reverb.com". msretailer.com. December 16, 2015. Retrieved January 15, 2018.
  14. "The Brilliant Way One Founder Made a Killing From the Music Industry". inc.com. Retrieved January 15, 2018.
  15. "Reverb.com gets pleasant feedback: $2.3 million". chicagobusiness.com. Retrieved January 15, 2018.
  16. "Reverb, Marketplace for Musicians, Cranks Up With $25 Million in Funding". Billboard. Retrieved January 15, 2018.
  17. "How to scale without crashing and burning? Secrets of 8 smart entrepreneurs #sbwchi". chicagobusiness.com. Retrieved January 15, 2018.
  18. https://www.americaninno.com/chicago/inno-news-chicago/reverb-launches-its-online-vinyl-record-marketplace/
  19. "Reverb Scores Hiring Hat Trick". msretailer.com. September 8, 2016. Retrieved January 15, 2018.
  20. "Music Inc. Magazine — November 2017 Digital Edition". musicincmag.com. Retrieved January 15, 2018.
  21. "Up Close: Reverb.com - Music Connection Magazine". musicconnection.com. Retrieved January 15, 2018.
  22. "Relevant work experience for this startup? Try 10 years as a touring musician". Built In Chicago. Retrieved January 15, 2018.
  23. "MSR 01 2017 (January)". MSR 01 2017 (January). Retrieved January 15, 2018.
  24. "Billy Corgan Is Selling a Ton of Smashing Pumpkins Guitars and Gear". Spin. July 13, 2017. Retrieved January 15, 2018.
  25. "Black Sabbath Drummer Bill Ward Selling Vintage, Studio-Used Gear". Rolling Stone. Retrieved January 15, 2018.
  26. "E Street Band Guitarist Nils Lofgren Selling Instruments, Vintage Gear". Rolling Stone. Retrieved January 15, 2018.
  27. "You Can Now Buy Wilco's Old Instruments, Gear, Test Pressings, More - Pitchfork". Pitchfork. Retrieved January 15, 2018.
  28. "Jimmy Chamberlin Is Selling His Old Smashing Pumpkins Stuff - Pitchfork". Pitchfork. Retrieved January 15, 2018.
  29. "Nirvana's 'In Utero' Microphones Headed to Steve Albini-Approved Auction". Rolling Stone. Retrieved January 15, 2018.
  30. "Dinosaur Jr.'s J Mascis Selling Over 100 Pieces of Gear - Pitchfork". Pitchfork. Retrieved January 15, 2018.
  31. "Here's Your Chance to Own a Piece of Steve Vai's Gear". guitarworld.com. Retrieved January 15, 2018.
  32. "Mike Gordon Partners With Reverb To Sell Gear Used In Studio & On Tour". jambase.com. October 10, 2017. Retrieved January 15, 2018.
  33. "Nine Inch Nails collaborator Alessandro Cortini to launch new Reverb shop". factmag.com. August 19, 2017. Retrieved January 15, 2018.
  34. "Brent Hinds to Sell His Personal Guitars, Amps, and More in Official Reverb Shop". reverb.com. Retrieved September 17, 2018.
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