Why it matters: Etsy's acquisition of Reverb is an opportunity to expand into a new vertical while still focusing on its core strength - connecting buyers and sellers. It also shares a similar business model so there shouldn't be much of a learning curve for the new owner.

Etsy, the online marketplace for handmade and creative goods, is hoping to attract a whole new category of customer to its stables through the acquisition of Reverb Holdings, Inc.

Founded in Chicago in 2013, Reverb is a web-based marketplace for new, used and vintage music gear. It was founded on the idea that buying musical instruments should be both easy and affordable. Etsy is playing $275 million in cash for the asset and plans to close late in the third quarter pending customary closing conditions.

Etsy CEO Josh Silverman described Reverb as a vibrant, two-sided marketplace that is lighting in a bottle. “There are only a handful of them operating at scale and Reverb is one.”

“Reverb is the 'Etsy' of musical instruments, with significant competitive advantages, and we see tremendous value and untapped potential in the business,” he added.

Reverb founder and CEO David Kalt said Etsy gave him the confidence to launch his site when he saw the need for a musician’s marketplace in 2013.

Kalt will continue to serve as CEO until Etsy identifies a new leader and will remain closely involved to help during the transition period. Reverb will operate as a standalone business once the transaction is complete, we’re told.

Masthead credit: Musical instruments by Zarya Maxim Alexandrovich