Seeking to reach a younger audience, e-commerce platform Etsy is planning on acquiring London-based Gen Z fashion marketplace Depop for $1.62 billion. Depop will retain its existing offices and no staffing changes are planned.
Founded in 2011 by Simon Beckerman, Depop counts approximately 30 million registered users, 90% of which are below the age of 26, across 150 countries. In 2020 the company generated $70 million in revenue, primarily through sales commissions. Volumes traded across the platform clocked in around $650 million during this time period.
Focusing on vintage or recycled clothing, Depop has struck deals with major labels including Adidas, Benetton and Ralph Lauren as they seek to tap into the sustainability factor.
“Many of the challenges that we are going through as a business are things that Etsy has gone through before,” said Depop’s CEO Maria Raga. “Etsy has made massive improvements in terms of search and discovery, and this is something that we can definitely learn from.”
Etsy says that “the second-hand market is projected to grow at a 39% compound annual growth rate from 2019 to 2024 in the US, reaching $64 billion, and to grow to twice the size of fast fashion on a global basis,” making a strong case for the purchase.
“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,” commented Etsy CEO Josh Silverman.
The deal is funded through Etsy’s available liquidity and is expected to close in Q3 of this year.