Hunch, a New York City startup that offers a new technology for discovering and sharing product recommendations, has been acquired by eBay.
Michael Arrington, who first broke the news, cited the purchase price as around $80 million. The company had raised about $20 million in funding.
The online marketplace will use its new acquisition to help improve its recommendations, eBay's chief technical officer Marc Carges told the San Jose Mercury News.
"We sell a lot of very unique items that don't have bar codes or UPC codes, they might be one-off collectibles, but we also sell things like telephones, iPhones and tablets," Carges said. "So the challenge is to have a recommendation system that takes advantage of this breadth and wealth of inventory."
EBay said in a statement that Hunch would be used to help the marketplace "expand and grow merchandising and relevance capabilities to further improve the shopping and selling experience for eBay customers. For example, eBay buyers are expected to benefit from Hunch’s predictive ability to generate meaningful, yet often nonobvious, recommendations for items available on eBay based on their specific tastes.”
Hunch added in a blog post: “We’ll be tackling all kinds of interesting challenges as part of eBay including predictive merchandising, interpreting unstructured data and creating merchant insights.”
Hunch was founded in 2008 and launched in June, 2009, to a lot of buzz: Its co-founders include Caterina Fake, who founded Flickr and sold it to Yahoo in 2005, and Chris Dixon, who co-founded SiteAdvisor and sold it to McAfee in 2006. Its other co-founders are Tom Pinckney and Matt Gattis. (Fake left a day-t0-day role at the company in November, 2010, but the other three co-founders will stay on and work with eBay.)
Besides the technology, San Jose, Calif-based eBay also liked Hunch's New York location.
"This is an opportunity to establish a technology center here in New York City," Carges said. "The consumer Internet technologies are really blossoming in New York and this allows us to not only take advantage of the talent in Silicon Valley,...but also in other parts of the country, specifically in New York.
Hunch is eBay's 11th disclosed acquisition in 2011. (Others this year include Brands4friends, a German online fashion and shopping club bought for some $200 million, and mobile carrier billing service Zong, bought for $240 million.) In 2010, eBay acquired three companies, spending a total of $95.9 million.