Etsy to buy Depop for $1.6 billion to attract young shoppers
Etsy Inc., the online marketplace for crafts and vintage items, is buying secondhand fashion app Depop for $1.63 billion as it seeks to expand its customer base and attract younger users.
The deal will create “significant opportunities for shared expertise and growth synergies” between the two e-commerce sites as the trend for trading recycled clothing continues to grow, New York-based Etsy said in a statement Wednesday. The deal, which is primarily cash, is expected to close in the third quarter.
Depop was set up in 2011 as a “community-powered marketplace” to buy and sell used fashion and has become one of the most popular e-commerce sites, particularly among younger, environmentally conscious consumers. About 90% of Depop’s active users are younger than 26 and Depop is the 10th-most-visited shopping site among Gen Z consumers in the U.S., according to Etsy, whose users tend to be older.
Etsy rose more than 7% to close at $174.14 in New York trading.
Instant soup mix, dresses, sneakers, appliances and so on. Buy common consumer items cheap; resell for more, maybe much more. COVID lockdowns supercharged it.
The secondhand market in the U.S. is projected to hit $64 billion by 2024 and to grow to twice the size of fast fashion on a global basis. Etsy Chief Executive Josh Silverman said the deal will extend Etsy’s presence in the resale market and enable it to help Depop, an early-stage business, expand and drive further growth and profitability.
Depop, which has about 30 million registered users across nearly 150 countries, will continue to be based in London and will operate as a stand-alone marketplace run by its existing team. Following the deal, Etsy will have three distinct brands — Etsy, Reverb and Depop.
Maria Raga, CEO of Depop, said people “come to Depop for the clothes, but stay for the culture” and the business will benefit from the “resources of a much larger company whose values are so aligned with ours here at Depop.”