The marketplace apps will continue to operate as separate entities
Etsy, Inc. has entered an agreement to acquire Depop, a privately held buy-and-sell fashion marketplace popular in the reselling community.
The deal is expected to close in the third quarter of 2021 for US$1.625 billion.
Depop, founded in 2011, will continue to be headquartered in London, England and operate as a standalone marketplace run by its existing leadership team.
Depop's 2020 gross merchandise sales and revenue were approximately $650 million and $70 million, respectively, each increasing over 100 per cent year-over-year.
The marketplace now has a community of approximately 30 million registered users across nearly 150 countries, with four million active buyers and two million active sellers in 2020.
Representatives at Etsy say that Depop has a highly differentiated position in the fast-growing resale space. The marketplace is primarily known for its vintage, streetwear, one-of-a-kind and Y2K (late 1990s/early 2000s) fashion.
Young consumers are adopting secondhand fashion faster than any other audience, Etsy says. About 90 per cent of Depop's active users are under the age of 26, and Depop is the 10th most visited shopping site among Gen Z consumers in the U.S.
Depop's monthly brand awareness surveys indicate it has encouraged high awareness for the Gen Z demographic within the resale sector.
“We are simply thrilled to be adding Depop — what we believe to be the resale home for Gen Z consumers— to the Etsy family,” says Josh Silverman, CEO of Etsy, 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.”
The secondhand market is projected to grow at a 39 per cent compound annual growth rate from 2019-2024 in the United States, reaching $64 billion, and to grow to twice the size of fast fashion on a global basis.
The addition of Depop significantly grows Etsy's gross merchandise sales in the apparel sector, which was approximately $1 billion in 2020.
“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, e-commerce brands," says Silverman.
Depop's CEO Maria Raga concurs. "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,” she says.
“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.”