Etsy to acquire London-based fashion resale marketplace Depop for $1.6bn

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Etsy, Inc., which operates two-sided online marketplaces that connect millions of creative buyers and sellers around the world, has signed a definitive agreement to acquire Depop, a privately-held, community-led, and purpose-driven marketplace for unique fashion for $1.625bn.

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Following the closing of the transaction, currently anticipated to occur during the third quarter of 2021, Depop will continue to be headquartered in London, England and operate as a standalone marketplace run by its existing leadership team.

Founded in 2011, Depop is a community-powered marketplace to buy and sell unique fashion, with a mission to build the world’s most diverse and progressive home of fashion. Depop’s 2020 gross merchandise sales (GMS) and revenue were approximately $650m and $70m, respectively, each increasing over 100% year-over-year.

Depop’s GMS grew at a compounded annual growth rate of nearly 80% from 2017-2020.

Josh Silverman, Etsy, Inc. CEO, commented, “We are simply thrilled to be adding Depop—what we believe to be the resale home for Gen Z consumers—to the Etsy family. 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. 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 CEO Maria Raga said: “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.”

The transaction is currently expected to close during the third quarter of 2021.

Industry reaction

Alex Payne, CEO at eDesk, says: “Etsy’s acquisition of Depop, in a move to capture a younger audience, is the latest business step-change in another explosive year for eCommerce. The $1.6bn takeover underscores our belief that online shopping has no intention of slowing down, even with stores reopening.

“This comes as apps with younger demographics such as TikTok and Depop have rocketed, revolutionising marketing to Gen Z and influencing their buying decisions. Growing up in an on-demand world, with products easily and immediately delivered to their doorstep, Gen Z’s expectations around fast customer service and a frictionless experience are unparalleled.

“Our recent survey of UK online shoppers revealed that 37% have used Etsy and 22% Depop, demonstrating a solid base for both but significant room for growth. By combining these businesses with Gen Z’s desire for uniqueness, this acquisition could help make this trend ‘leap forward’ even further.

“A fashion marketplace, Depop offers the aesthetics of Instagram with the functionality of eBay, designed with younger, social media-savvy users in mind. It cements the emerging importance of social networks as a purchasing tool, such as Instagram Shopping, in a multi-channel world we have before us and retailers must be smart on how they navigate this. This deal should be a wake-up call for online sellers to think carefully about how they will support this next generation of shoppers.

“Gen Z places a higher value on the environment and are more sustainability-conscious consumers. For this always-on, entrepreneurial generation, a sale or purchase won’t cut it. Sellers must ensure their brand image extends throughout the entire customer experience, so that means providing buyers all relevant information about their order that they might need, from purchase to delivery to after-care.”

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