Yelp, which became famous for providing restaurant information, just acquired an auto service website.
Yelp announced in its earnings call Thursday that it has agreed to acquire auto repair quote site RepairPal for $80 million in cash. The acquisition is expected to close by the end of the year, subject to customary closing conditions.
“RepairPal expands our offering in the multi-billion dollar U.S. auto services advertising space, and we are proud to be able to I believe this will accelerate our efforts to provide a wide range of services.”
It may not seem like an obvious marriage, but RepairPal fits into Yelp's ambitions to become the dominant home services funnel.
In recent years, Yelp has added features beyond its restaurant and business search tools, including an AI-powered feature that suggests plumbers, repairmen, and other home service providers to users who potentially need them. Yelp has also introduced programs like Yelp Guaranteed, which provides up to $2,500 in coverage for eligible projects if something goes wrong.
Yelp makes money through advertising and fees it receives from service providers for specific leads. In the company's most recent fiscal quarter (Q3 2024), advertising revenue from its services business increased 11% year over year to $228 million, a record high, with revenue from the home services segment alone increasing by approximately 15%. It became.
In a letter to shareholders, Yelp said RepairPal generated approximately $30 million in revenue and was close to breaking even on cash and net income.
“We believe there are clear synergies between Yelp and RepairPal,” the letter said. “RepairPal brings deep knowledge of auto repair and pricing that we can leverage to improve our offerings for auto service businesses. We also maintain a partner network. On the other hand, Yelp has a large consumer base and expertise in areas such as search engine optimization, search engine marketing, and AI, which we believe will bring value to RepairPal in the future. ”
The acquisition is a good exit for San Francisco-based RepairPal, which has successfully raised $21.3 million in funding from Cars.com, Tugboat Ventures and others in the 17 years since its founding. In its press release, Yelp did not say whether founders Aaron Tavistock, David Esser, and David Staats would join the Yelp corporation.
A Yelp spokesperson subsequently confirmed to TechCrunch that all RepairPal employees, including management, will be joining Yelp (with the exception of the founder, who is no longer at the top of the company).