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Etsy is acquiring creative gadget shop Grand St. for an undisclosed sum, the firm announced today.

Grand St., which raised $1.3 million in April 2013, has spent the past two years evolving from a standard ecommerce shop into a product incubator. The news was first reported by Fortune.

This news arrives as talk of an Etsy IPO grows. For Etsy, this deal could lead to a shift in its public image; since its inception, Etsy’s offerings have revolved around crafty, homemade goods — not indie hardware startups. No matter how far off Etsy’s public debut may be, diversification is likely a good sign.

Here’s Etsy chief Chad Dickerson’s announcement post:

Today, we’re excited to announce that we’re acquiring Grand St., the marketplace for creative technology, subject to closing conditions. Grand St. connects independent hardware makers with passionate buyers, harnessing a wave of innovation happening outside the mainstream consumer electronics industry. What unites Etsy and Grand St. is a shared vision of the way making is changing, and we’re excited to learn from their community. The team behind Grand St. — including co-founders Amanda Peyton, Joe Lallouz and Aaron Henshaw — will join Etsy but continue to operate the Grand St. marketplace in the near term.

As we’ve seen here at Etsy, shoppers are increasingly interested in unique and innovative goods, especially when they know and can be involved in the story behind the product. At the same time, it’s becoming easier than ever for independent makers and designers to bring ideas to market and find a global audience. Grand St. gets this — that’s why we’re such a good fit.

A curated marketplace, Grand St. addresses indie hardware makers at different stages in the development cycle. Their pre-orders feature showcase products that are not yet widely available, but will be soon. Their beta feature lets makers get direct feedback from buyers on products that are still evolving. And their shop feature is for consumer-ready products that are 100% functional and currently shipping, with guaranteed customer satisfaction.

Grand St. strives to enable small designers and maker teams to find a legitimate path to market, just as Etsy’s goal is to empower our sellers to start and grow their independent, creative businesses. We are so excited to continue making this progress together.

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