Etsy is set to buy Depop in a deal worth $1.6 billion marking its largest acquisition to date as it seeks to attract ‘Gen Z’ shoppers.
Etsy, which purchased online musical instrument marketplace Reverb for $275 million in 2019, said it expects to finalise the acquisition in the third quarter of this year should it receive regulatory approval in the US and UK, where Depop is based.
Depop has seen staggering growth since its foundation in 2011, emerging as one of the pandemic’s few success stories last year enjoying over 100 per cent growth in both gross merchandise sales and revenues topping $650 million and $70 million respectively.
The platform, which specialises in unique second-hand fashion, is the 10th most visited shopping site among Gen Z consumers, and around 90 per cent of its active users are under 26.
Aside from fitting comfortably within Etsy’s roster of specialist online marketplaces, it will also give the group a significant foothold in both the increasingly prevalent fashion retail market and with younger shoppers.
READ MORE: Etsy to buy Reverb for $275m
In the US the second-hand market is expected to see compound annual growth rates of 39 per cent between 2019 and 2024, set to be worth a whopping $64 billion by then growing to twice the size of fast-fashion on a global basis.
“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,” Etsy’s chief executive Josh Silverman said.
“Depop’s world-class management team and employees have done a fantastic job nurturing this community and driving organic, authentic growth in a way that aligns well with Etsy’s DNA and mission of Keeping Commerce Human. 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, ecommerce brands.”
Depop’s chief executive Maria Raga added: “We’re on an incredible journey building Depop into a place where the next generation comes to explore unique fashion and be part of a community that’s changing the way we shop.
“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. 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.”