Yelp, known for its restaurant recommendations, has just acquired an auto services website called RepairPal. This acquisition, announced in Yelp’s recent earnings report, involves an $80 million cash deal and is set to be finalized by the end of the year pending standard closing conditions.
According to Jeremy Stoppelman, Yelp’s co-founder and CEO, the purchase of RepairPal is expected to enhance Yelp’s presence in the U.S. auto services advertising sector, which is worth billions of dollars. While the connection between a restaurant review platform and a car repair estimate site may not be immediately clear, RepairPal aligns with Yelp’s goal of expanding into various home services.
In recent years, Yelp has broadened its offerings beyond restaurant and business searches to include features like AI-powered recommendations for plumbers, repair services, and other home service providers. Programs like Yelp Guaranteed, providing up to $2,500 coverage for specific projects, have also been introduced. The company generates revenue through fees from service providers for leads and advertising.
In the third quarter of 2024, Yelp’s advertising revenue from service businesses increased by 11% year-over-year to a record $228 million, with a substantial revenue growth of around 15% in the home services category alone. The shareholder letter highlights the potential synergies between Yelp and RepairPal, with RepairPal’s expertise in auto repairs and pricing complementing Yelp’s strengths in consumer reach and marketing strategies.
RepairPal, based in San Francisco, has raised $21.3 million in funding over its 17-year history. Although Yelp has not disclosed whether RepairPal’s founders will join the company, all employees, including the leadership team, are set to become part of Yelp.
The acquisition of RepairPal marks a strategic move for Yelp to strengthen its position in the home services market and enhance its offerings for consumers seeking auto services. By integrating RepairPal’s knowledge and partner network with its existing capabilities, Yelp aims to provide a more comprehensive range of services and further solidify its presence in the competitive online services sector.
