Yelp, which made its name with restaurant reviews, just bought a car service website.
In the company’s earnings report Thursday, Yelp announced that it agreed to acquire RepairPal, an auto repair estimation site, for $80 million in cash. The acquisition is expected to close by the end of the year, subject to customary closing conditions.
“We believe RepairPal will accelerate our broader service efforts by expanding our offerings across the billion-dollar U.S. automotive service industry,” said Jeremy Stoppelman, co-founder and CEO of Yelp, in a statement.
While it may not seem like an obvious marriage, RepairPal fits into Yelp’s ambition to become a major home service funnel.
In recent years, Yelp has added functionality beyond its search tools for restaurants and businesses, such as an AI-powered feature that suggests plumbers, repairmen and other home service providers to users who might need them. Yelp has also introduced programs like Yelp Guaranteed, which provides up to $2,500 in coverage for eligible projects in case of problems.
Yelp makes money through fees it receives from service providers for certain leads – and through advertising. In the company’s most recent fiscal quarter (Q3 2024), advertising revenue from services companies rose 11% year over year to a record $228 million, with revenue growth of approximately 15% in the home services category alone.
In the shareholder letter, Yelp said RepairPal generated approximately $30 million in revenue and was approximately break-even on cash and net income.
“We believe there are clear synergies between Yelp and RepairPal,” the letter reads. “RepairPal brings deep knowledge of auto repairs and pricing that we can use to enhance our offering for auto service providers. They also maintain a robust partner network, including CarMax, USAA and Endurance Vehicle Services. Meanwhile, Yelp has a large consumer audience and expertise in areas such as search engine optimization, search engine marketing and AI, which we believe will add value to RepairPal in the future.”
The acquisition is a nice exit for San Francisco-based RepairPal, which has managed to raise $21.3 million in funding from Cars.com, Tugboat Ventures and others in the 17 years since the company was founded. In its press release, Yelp did not say whether founders Aaron Tavistock, David Esser and David Sturtz will join Yelp Corporate.
A Yelp spokesperson later confirmed to TechCrunch that all RepairPal employees, including its leadership (but not the founders, who are no longer heading the company), will be joining Yelp.
