The European online swapping service, Netcycler, which uses an algorithm to match up multiple people with mutually sought after goods to trade, has acquired U.S. rival Swap.com, which offers simpler, one-to-one trades. The acquisition took place back in late August but has only just been confirmed. Terms of the deal have not been disclosed. It’s also not clear whether Netcycler plans to brings its multi-person algorithmic swapping technology to Swap.com in future. (Update: Netcycler has confirmed it is already incorporating and extending its algorithmic technology under the Swap.com brand — see update below for more).
Swap.com’s “large user base” appears to be the immediate target here. Netcycler cofounder and chairman Jussi Koskinen, noted that the acquisition will help Netcycler grow its service in North America — a market it’s just launching into. “We are just launching the Netcycler service in the US, and the well-known brand and half a million users of Swap.com will for sure help us grow our presence here,” he said in a statement.
Netcycler is currently running both brands — but is only using the Swap.com brand in the U.S. It has just launched a new service under the Swap.com brand called the Swap.com Valet Service — targeting parents with kids’ kit to offload. The service is similar to ThredUp but with a broader category of items that can be listed. Parents send off their unwanted kids’ items such as clothes and toys; the Valet service photographs, stores and lists the items; and the parents set the price they want to sell the items for (or chose alternative items to trade with).
“With the new service, we completely avoid the inherent problems of C2C [comsumer-to-consumer] online auctions and marketplaces, like lack of trust towards trade partners, unreliability of delivery, and high shipping costs,” said Netcycler co-founder and chairman Jussi Koskinen in a statement.
“The purpose of acquiring Swap.com is to radically improve how trading of pre-owned goods is done and to form a clear category leader,” he added. “What we are creating is the world’s first C2C department store with a very scalable business model.”
Netcycler has set up its first logistics center for the Swap.com Valet Service close to Chicago, in Addison.
Update: A Netcycler spokesman has confirmed it’s using its trade rings technology for the new Swap.com Valet service. “We have incorporated our algorithm technology into the new Swap.com Valet Service. Even better, in combination with the new concept of having all the items being traded in our logistics center (and not in the attics of users), we can extend the size of the rings to unlimited. In the European concept we have limited the size of the trade rings to five participants, as consumer behaviour-related uncertainties otherwise become too significant with larger rings. With the logistics center we are fully in control, and can make sure even larger rings works. And users won’t have to trust or meet strangers.”