Yelp, best known for its role in restaurant recommendations, has taken a major step into auto services by acquiring RepairPal, a website specializing in car repair estimates. The deal, announced in Yelp’s latest earnings report, involves an $80 million cash payment and is anticipated to close by year’s end, pending typical regulatory approvals.
Yelp CEO and co-founder Jeremy Stoppelman highlighted how this acquisition aligns with Yelp’s broader vision to enhance its services, particularly within the expansive U.S. auto services ad market. “We believe RepairPal will accelerate our efforts by expanding offerings in this multi-billion-dollar sector,” Stoppelman said.
While initially, a partnership with a car repair estimates site might seem out of place, the acquisition is in line with Yelp’s ongoing expansion into home and personal services. Over recent years, Yelp has broadened its scope, adding tools to connect users with plumbers, contractors, and various other service providers. Yelp has also introduced initiatives like Yelp Guaranteed, which offers up to $2,500 in coverage for qualifying projects if issues arise.
Yelp generates revenue by charging service providers for lead generation and through ads. The company’s latest fiscal results show service-based ad revenue has grown significantly, with Q3 2024 reporting an 11% year-over-year increase, reaching a record $228 million. Notably, revenue in the home services category alone surged by about 15%.
RepairPal, with an estimated $30 million in annual revenue and near break-even status, brings valuable expertise in auto repair pricing and a strong partner network that includes CarMax, USAA, and Endurance Vehicle Services. Yelp sees clear synergies here, as noted in their shareholder letter: “RepairPal brings extensive knowledge in auto repair and pricing that can improve Yelp’s service offerings. Meanwhile, Yelp’s large user base, SEO proficiency, and experience in search marketing and AI should benefit RepairPal.”
The acquisition marks a favorable outcome for San Francisco-based RepairPal, which raised $21.3 million from investors like Cars.com and Tugboat Ventures over 17 years. Although Yelp hasn’t indicated if RepairPal’s founders — Aaron Tavistock, David Esser, and David Sturtz — will assume roles at Yelp, it has confirmed that RepairPal’s current employees, including its leadership team, will be joining Yelp as part of the acquisition.
With this move, Yelp looks to strengthen its position as a comprehensive service marketplace, adding significant value for consumers seeking reliable auto repair estimates alongside its broader network of service recommendations.
