It’s been a busy week for Reverb.com.
On Tuesday, the online music gear marketplace announced that it has raised a $15 million round of funding to boost its international expansion efforts. The news comes on the tail end of the announcement of Reverb LP, a soon-to-come marketplace for music collectors.
New investors include Paypal co-founder Max Levchin, former Twitter COO Adam Bain and a number of leaders from the music instrument industry.
“We’re not just helping people buy and sell music gear, we’re helping mom-and-pop shops keep the doors open, empowering working musicians to gain extra income and affordable gear and even putting artists’ gear into the hands of their fans,” said co-founder and CEO David Kalt in a statement. “Our momentum is undeniable — particularly as we continue to expand globally — and we’re overwhelmed by the excitement we’ve received from new and existing investors who want to support and be part of what’s next.”
Reverb said its international user base grew by 700 percent last year, with international sales growing by 150 percent. The additional funding will help the startup invest in personnel, tools and technology to support that expansion further.
Founded in 2013, Reverb is an online marketplace where musicians sell both new and used music instruments and equipment. Kalt, who owns the Chicago Music Exchange, started Reverb to provide an online alternative to selling gear on eBay, which at the time could charge vendors a commission of nearly 10 percent per sale, depending on the transaction size.
Kalt, who is also a co-founder of electronic trading platform optionsXpress, knows an inefficient market when he sees it — and decided to do something about it. Reverb charges vendors 3.5 percent of the sale amount, up to a maximum of $350.
That model has helped Reverb grow into the world’s largest music gear website, offering news and reviews alongside its selection of instruments and gear. The company currently has 150 employees, and is on track to make $429 million in sales this year.
Shutterstock CEO Jon Oringer, who participated in Tuesday's funding round, said his decision to invest was partly rooted in his personal experience with the service.
“As a regular user of Reverb.com, I am witnessing first-hand the positive impact that the company is having on musicians and the way instruments are bought and sold,” Oringer said in a statement. “I’m excited to support not only a successful marketplace - as that business model has proven itself powerful - but a company that’s uplifting an entire industry.”
Reverb, whose site is visited by 10 million musicians every month, expects to continue its Chicago hiring spree.
Later this year, Reverb is also seeking to become a destination for record collectors — a move that will expand the company's addressable market.
The round brings Reverb’s funding total to $47 million.
Image via Reverb.com.