E-commerce site Etsy, best known for selling handmade and vintage goods, is buy a cooler, younger rival, UK-based thrift shopping app Depop.
The $1.6 billion acquisition gives Etsy access to Depop’s young and growing user base. Etsy says that more than 90 percent of Depop’s users are under the age of 26, meaning they mostly belong to Gen Z, while Etsy’s own users are firmly millennial, with an average seller age of around 39. Etsy claims that Depop the 10th most visited shopping site is for Gen Z consumers in the US.
“We’re just thrilled to add Depop – which we believe is the resale home for Gen Z consumers – to the Etsy family,” Etsy CEO Josh Silverman said in a press statement. “Depop is a vibrant, two-sided marketplace with a passionate community, a highly differentiated offering of unique items, and we believe there is significant potential to scale further.”
Founded in 2011, Depop shares Etsy’s love for used clothing. But while Etsy’s brand tends to be more vintage and cozy, Depop’s is more fashionable. Depop’s revenue doubled to $70 million last year, with the bulk of this revenue coming from sales commissions.
While Etsy gains access to Depop’s users, Depop itself will be able to draw on Etsy’s experience to scale internationally. “Many of the challenges we go through as a company are things Etsy has gone through before,” said Maria Raga, CEO of Depop, told The Financial Times. “Etsy has made huge improvements to search and discovery, and this is something we can definitely learn from.”
The acquisition is the latest sign of activity in the second-hand clothing market, although things are not exactly stable. For example, Depop rivals Poshmark and Thredup have both seen market caps rise on successful IPOs before falling again when financial earnings revealed mounting losses amid revenue growth. And Etsy itself has its stocks fall from pandemic high as global lockdowns begin to lift and brick-and-mortar retailers reopen. Grabbed Depop seems like a way to reduce that exposure and gain access to a mobile-first user base.