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Gadget Return Site Gazelle Sells for $18 million

Nov 03, 2015

Gazelle, a Boston-based e-commerce company which buys and sells used smartphones, has raised $61.9 million in venture backing from RockPort Capital Partners, Venrock, Craton Equity Partners and Physic Ventures, according to CB Insights. In 2013, the company had $113 million in revenue.

That year, Apple launched its own trade-in program. This year it launched one for non-Apple phones.

Apple's move may have hurt Gazelle’s sales. Last week, with hardly a peep, the Gazelle sold to a kiosk business called Outerwall for just $18 million.

The news wasn't even in the press release for Outerwall’s quarterly earnings. But Fortune was pointed to a disclosure buried in the company's 10-Q filing with the SEC:

On October 29, 2015, Outerwall Inc. entered into an asset purchase agreement with Gazelle, Inc., a Delaware corporation that provides consumers an on-line solution for the sale and purchase of used mobile phones, computers and tablets. Under the Agreement, we will buy certain assets and liabilities of Gazelle. The total purchase price is approximately $18.0 million subject to certain adjustments including for net inventory at the closing date. The transaction is expected to close during the fourth quarter and is subject to customary closing conditions. Upon closing, the transaction will be accounted for as a business combination.

Outerwall is best known for its Redbox movie rental kiosks and Coinstar money processing kiosks. The company’s interest in Gazelle comes from its newest product line of kiosks called ecoATM, into which customers can deposit and recycle their used electronics.

In a statement provided to Fortune, Art Pettigrue, senior director of marketing communications and public relations at Outerwall, said the deal "c ombines the best in automated and online reCommerce, providing greater consumer choice, value and convenience for buying, selling and recycling pre-owned devices ."

Regarding whether Gazelle's team will join Outerwall, and whether the Gazelle brand will continue, Pettigrue said the "implementation details are still being finalized."

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