Ecommerce company Etsy today disclosed in a filing that it spent $32.5 million to acquire Blackbird Technologies, a startup that had developed artificial intelligence (AI) software that could be used for various search applications in the context of shopping.
“The Company completed this acquisition to improve the quality and relevance of search on Etsy.com,” says the SEC filing.
Here’s the full breakdown on the financials:
Total consideration for the acquisition was approximately $15.0 million, consisting of $8.1 million in cash and 513,304 shares of the Company’s common stock with a fair value of $6.9 million on the acquisition date. Additionally, the Company issued 184,230 shares of common stock or restricted stock units (“RSUs”) on the acquisition date with a fair value of $2.5 million which are tied to continuous service with the Company as an employee and are being accounted for as post-acquisition stock-based compensation expense over a three-year vesting period. The Company will pay up to an additional $8.8 million in cash and issue up to an additional 460,575 shares of RSUs post-close with a fair value of $6.2 million, both of which are also tied to continuous service with the Company as an employee and are being accounted for as post-acquisition stock-based and other compensation expense over a three-year vesting period. A portion of the consideration and post-acquisition compensation is subject to indemnification provisions.
On its website, Blackbird says the team has “built search at Google, Yahoo, databases at Oracle, scaled Twitter to 200 million users, used computer vision for self-driving cars at Stanford and enterprise sales at Box.”
Previous Etsy acquisitions include Adtuitive, A Little Market, Grand St., Jarvis Labs, Lascaux Co., Mixel, and Trunkt.
Etsy closed out the third quarter of this year with a $2.39 million GAAP loss on $87.56 million in revenue, according to today’s filing.