Etsy just bought Depop for $1.6 billion

Is Etsy going after Gen-Z? Short answer: Yes.

In a landmark acquisition for fashion resale e-commerce, online artisan marketplace Etsy, has just acquired fashion resale app, Depop, for $1.6 billion. 

In a concerted effort to expand its reach with Gen-Z consumers, Josh Silverman, Etsy’s Chief Executive said of the deal, “We think Gen Z is the most exciting community within resale,” noting that resale was, “Well positioned for growth well into the future.” 

As part of deal announcement, Depop revealed it now has over 30 million users registered globally, a metric that saw exponential growth during the peak of the Pandemic last year, between March and Nov 2020. It is estimated more than 90% of the active user demographic is made up of Gen-Z buyers and sellers under the age of 25, while Etsy’s customers are typically Millennials, with an average user age of 39.

The trend for online vintage resale, trading and up-cycling has taken-off in recent years, with Depop ‘pioneering’ the trend with the launch of the fashion resale app a decade ago, in 2011. The trend has now amassed to billions of dollars for e-commerce platforms. Traditional fashion e-tailers have been left with no choice but to build out their own resale offerings as consumer demand for more sustainable fashion increases or, get left behind.

Depop has seen its revenues more than double in the past year to $70 million and the value of traded goods amounting to an estimated $650 million. While Etsy has benefited from a tailwind from the economic rebound of early 2021, reporting revenue growth of 142% in the first quarter of the year.

Depop’s CEO Maria Raga said of the deal, they were focused on, "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.” Of the platform’s staying power, she said, “They come to Depop for the clothes, but stay for the culture”, a culture whose values align closely to those of Gen-Z.

The CMA (the UK’s Competition and Markets Authority) has upped its scrutiny of tech deal-making in recent months, with particularly close watch of large US-tech companies acquiring smaller British and European counterparts. Following completion of the deal, it is planned that Depop will continue to be run by its existing leadership team from its headquarters in London.