Yelp invests 80 million dollars in a car repair estimate platform.

Yelp, known for its restaurant recommendations, has expanded its reach by acquiring RepairPal, a platform specialized in car repair estimates, for an amount of $80 million in cash. This transaction is expected to be completed by the end of this year, provided that customary closing conditions are met.

Jeremy Stoppelman, co-founder and CEO of Yelp, commented that the acquisition of RepairPal will accelerate the company's efforts in the services sector, expanding its offering in the lucrative automotive services advertising sector in the United States. While the combination of both companies may not seem obvious, RepairPal fits into Yelp's vision of becoming a reference point for home services.

In recent years, Yelp has evolved its functionality, adding tools that go beyond restaurant and business searches. For example, it has implemented AI-driven features that recommend plumbers, repairers, and other home service providers to users who may need them. Additionally, it has launched programs like Yelp Guaranteed, which provides up to $2,500 in coverage for qualifying projects in case issues arise.

The company generates revenue through commissions from service providers for certain leads, as well as through advertising. In its fiscal third quarter of 2024, Yelp reported an 11% increase in advertising revenue from service businesses, reaching a record $228 million, with nearly 15% growth in the home services category alone.

In the letter to shareholders, Yelp detailed that RepairPal generated around $30 million in revenue and was approximately at break-even in terms of cash flow and net income. The letter also mentions the clear synergies between the two companies, highlighting RepairPal's deep knowledge of automotive repairs and pricing, which Yelp can leverage to enhance its automotive services offerings. RepairPal already has a strong network of partners, including CarMax, USAA, and Endurance Vehicle Services. Meanwhile, Yelp brings a large consumer audience and expertise in areas such as search engine optimization and marketing, which are expected to benefit RepairPal in the future.

This acquisition represents a favorable exit for RepairPal, based in San Francisco, which during its 17-year history managed to raise $21.3 million in funding from investors such as Cars.com and Tugboat Ventures. In the official announcement, Yelp did not clarify whether founders Aaron Tavistock, David Esser, and David Sturtz would join the Yelp corporation, although a company spokesperson later confirmed that all RepairPal employees, including management (excluding the founders, who are no longer leading the company), will join Yelp.