US online marketplace Etsy is to acquire British second-hand fashion platform Depop for 1.6 billion dollars as part of a Gen Z push.
Etsy, a marketplace that specialises in handmade and vintage goods, announced Wednesday it plans to buy Depop primarily in cash as it looks to attract a younger audience.
Approximately 90 percent of London-based Depop's active users are under the age of 26 - a young and more environmentally conscious age group that is driving the wider resale market.
According to Etsy, the second-hand market is projected to grow at a 39 percent CAGR from 2019-2024 in the US, reaching 64 billion dollars - by which point it will be twice the size of fast fashion on a global basis.
Depop bought for 1.6 billion dollars
When the deal is closed, which is expected in the third quarter of 2021, Depop will continue to be headquartered in London and will operate as a standalone marketplace run by its existing leadership team.
“We are simply thrilled to be adding Depop - what we believe to be the resale home for Gen Z consumers - to the Etsy family,” Etsy CEO Josh Silverman said in a statement. “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.”
Founded in 2011, Depop is a community-powered marketplace particularly popular with Gen-Z consumers who like to buy and sell pre-loved clothing and other products.
The business initially launched in the UK before expanding to the US and Australia. Today, the company has approximately 30 million registered users across nearly 150 countries.
Last year, the company more than doubled revenue to 70 million dollars, while its gross merchandise sales (GMS) was around 650 million dollars, representing a compounded annual growth rate of nearly 80 percent from 2017-2020.