Etsy is betting big on the booming secondhand fashion market and Gen Z shoppers.
In its biggest deal to date, online marketplace Etsy has signed a definitive agreement to acquire Depop, a U.K.-based fashion resell marketplace popular with younger consumers around the globe, for $1.6 billion, consisting primarily of cash. The transaction is expected to close during the third quarter of 2021, with Depop operating as standalone marketplace run by its existing leadership team. Its headquarters will remain in London.
Founded in the U.K. in 2011, Depop is known for its vintage and streetwear collections. It has roughly 30 million registered users across 150 countries, with approximately 90% of its active users under the age of 26. Depop is the 10th most visited shopping site among Gen Z consumers in the U.S., according to Etsy.
The second-hand market is projected to grow at a 39% CAGR from 2019-2024 in the United States, reaching $64 billion, and to grow to twice the size of fast fashion on a global basis.
“We are simply thrilled to be adding Depop—what we believe to be the resale home for Gen Z consumers—to the Etsy family,” said Josh Silverman, CEO, Etsy, which also owns Reverb, an online marketplace for buying and selling new and used vintage musical instruments. “Depop is a vibrant, two-sided marketplace with a passionate community, a highly-differentiated offering of unique items, and we believe significant potential to further scale. We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous 'house of brands' portfolio of individually distinct, and very special, e-commerce brands."
In a statement, Depop CEO Maria Raga said that “our community is made up of people who are creating a new fashion system by establishing new trends and making new from old.”
“They come to Depop for the clothes, but stay for the culture,” she said. “We'll now take an exciting leap forward as part of the Etsy family, benefiting from Josh's and his team's expertise, and the resources of a much larger company whose values are so aligned with ours here at Depop."