Wedding planning powerhouse The Knot Worldwide has announced its acquisition of rival Zola, a move that comes amid ongoing scrutiny from Congress regarding its treatment of smaller wedding businesses.
Zola will continue to operate independently for now, remaining a part of The Knot Worldwide’s brand family, which includes well-known names such as The Knot, WeddingWire, WeddingPro, and Hitched. However, the specific financial details of the acquisition have not been disclosed.
Both Zola and The Knot provide similar services for couples, such as wedding registries, personal websites, and connections to various vendors like florists and DJs.
Zola’s co-CEO, Shan-Lyn Ma, attempted to calm vendor concerns in an internal memo, stating that this acquisition will create “greater visibility and new opportunities” for small businesses that rely on these wedding platforms to connect with potential customers.
She also reassured vendors about the future direction of their partnerships, emphasizing the important role of continuity and stability for their businesses. Ma and her co-CEO Rachel Jarrett will remain at the helm of Zola and will eventually transition to The Knot Worldwide’s executive leadership team after the deal is finalized. Zola committed to giving “clear advance notice” to small businesses well ahead of any new updates or opportunities.
The acquisition will need to satisfy “customary closing conditions, including required regulatory approvals,” with uncertainty about whether it will attract scrutiny from the FTC or the Department of Justice’s antitrust division.
A spokesperson for Knot Worldwide chose not to comment, and Zola did not respond right away.
Raina Moskowitz, CEO of The Knot, previously an executive at Etsy, has been focused on revitalizing the company’s offerings with advanced planning tools and improving relations with vendors who have expressed dissatisfaction.
Moskowitz remarked that incorporating Zola into their portfolio presents an exciting chance to help more wedding professionals thrive and craft personalized experiences for couples, from their first moment of inspiration to the wedding day itself.
According to a recent report, The Knot Worldwide had experienced a downgrade in its credit rating to junk status by Moody’s, indicating a high level of credit risk.
The Knot has been owned by investment firm Permira and has been a private entity since 2018, while Zola raised $100 million in 2018, valuing the company at approximately $600 million, with backing from investors like NBCUniversal and Goldman Sachs Investment Partners.
The Knot Worldwide has faced criticism from Senator Chuck Grassley, who referred to exclusive reporting highlighting alleged misconduct at the company, calling for an FTC investigation last October. His office reportedly received around 200 complaints from wedding vendors claiming that The Knot provided misleading customer leads and entangled them in difficult contracts.
In a letter sent earlier this year, FTC Chairman Andrew Ferguson warned that these alleged practices, if verified, could violate laws enforced by the Commission, aiming to protect small businesses from deception.
Despite the accusations, The Knot Worldwide has consistently denied any wrongdoing, asserting that it does not engage in fraudulent business practices.
Past acquisitions by The Knot, such as the wedding startup Simply Eloped, have also raised eyebrows among vendors who are concerned about the company’s increasing control over the wedding industry.
Representatives for Grassley and the FTC have not provided comments, and the DOJ has not yet responded to inquiries.
Reuters was the first to report on this acquisition.
