Greg's Corner

What the Letgo/OfferUp merger story could really mean

The online classifieds industry has been abuzz lately with the story of a potential merger between classifieds apps LetGo and OfferUp as reported by Recode. While the talks never went past the approaching stage, Recode seems to think that a merger of the two or an acquisition of OfferUp by LetGo could be inevitable. However, if a merger were to take place, would the emerging business be a successful one?

According to Recode, the financial situations of either company doesn’t appear to be too rosy. OfferUp has had trouble raising a new round of Funding while LetGo is still focused on building a userbase. If both companies were to merge at present, it seems like it would not benefit either company, leaving the merged company with razor-thin profit shares if any.

The problem with companies like this are the same ones that many tech start-ups have. Instead of trying to succeed with their own vision, many tech start-ups are simply looking to be bought out by a much larger and successful brand. Since LetGo and OfferUp have had no offers by their bigger competitors they may be looking to consolidate in order to simply keep their heads above water.