Yelp completes $80m acquisition of RepairPal, boosts auto services strategy

Yelp Inc., the popular platform known for connecting people with local businesses, has finalised its acquisition of RepairPal, a trusted auto services platform, for $80 million in cash. The move marks a strategic expansion into the U.S. auto services advertising market, which represents a multi-billion-dollar opportunity. RepairPal’s integration is expected to strengthen Yelp’s services portfolio and drive substantial growth in its already booming Services category.

RepairPal, established in 2007, has built a reputation for connecting consumers with certified, reliable mechanics nationwide. It collaborates with major companies, including USAA, CarMax, and Endurance Vehicle Services, to provide users access to high-quality auto repair services at competitive prices.

Jeremy Stoppelman, co-founder and Chief Executive Officer of Yelp, emphasized the acquisition’s strategic significance. He stated that Yelp’s advertising revenue from Services businesses reached a record $228 million in the third quarter of 2024, an 11% increase from the prior year. Stoppelman added that RepairPal’s expertise in the auto repair industry would complement Yelp’s existing offerings and help expand its reach in this critical vertical.

Yelp’s financial momentum fuels acquisition

Yelp’s latest financial results showcase the company’s ability to execute high-impact acquisitions. For the third quarter of 2024, the company reported record net revenue, driven by strong performance in its Services categories, including Home Services, which grew by approximately 15% year-over-year. The Services category has delivered double-digit revenue growth for 14 consecutive quarters, even as Yelp’s Restaurants, Retail, and Other segments faced challenges.

David Schwarzbach, Yelp’s Chief Financial Officer, attributed this success to disciplined financial management, with the company achieving an 11% net income margin and an adjusted EBITDA margin of 28% during the third quarter. Schwarzbach noted that the RepairPal acquisition aligns with Yelp’s capital allocation strategy, which aims to deploy resources effectively to support long-term growth initiatives.

Industry implications

This acquisition positions Yelp as a stronger player in the U.S. auto services market, enabling it to capitalise on a lucrative advertising opportunity. By integrating RepairPal’s established network of certified mechanics and trusted reputation, Yelp aims to enhance its platform’s value for users and advertisers alike.

The deal also reflects a growing trend among digital platforms to expand their vertical offerings through targeted acquisitions. As consumers increasingly rely on online resources for local business connections, Yelp’s move underscores its commitment to evolving in step with market demands.

Transaction advisors

The transaction saw TD Securities serve as exclusive financial advisor to RepairPal, with Fenwick & West LLP providing legal counsel. Cooley LLP acted as legal advisor to Yelp.