Etsy buys British fashion app Depop for $1.6bn in ‘Gen Z’ push

More than 90% of second-hand fashion app’s active users are under 26

Etsy is acquiring Depop, the second-hand fashion app, for $1.6 billion (€1.3 billion), as the handmade goods marketplace expands its portfolio to younger consumers.

The trend for trading vintage or recycled clothing online, which Depop helped pioneer a decade ago, has now spawned several multi-billion-dollar ecommerce companies, as traditional fashion retailers grapple with growing consumer demand for more ethical and sustainable production practices.

More than 90 per cent of Depop’s millions of active users are under 26, an age group known as “Generation Z”, giving Etsy access to a younger demographic than its main consumer base. Etsy users are typically millennials or older, with sellers’ median age around 39.

"The resale market in general is a massive market that we think is well positioned for growth well into the future," said Etsy chief executive Josh Silverman. "We think Gen Z is the most exciting community within resale."


Revenues at London-based Depop, which was founded in 2011, more than doubled last year to $70 million, mainly from sales commissions. Its active network of 4 million buyers and 2 million sellers traded goods worth about $650 million in 2020.

Depop has also struck partnerships with brands including Adidas, Benetton and Ralph Lauren, as fashion retailers look to boost their sustainability credentials.

‘Same mission’

“We share the same mission and we share the same values,” said Silverman. “We’re both about keeping commerce human. We’re both about supporting creative entrepreneurs.”

The takeover comes at a time when Nvidia's proposed $40 billion acquisition of UK-based chip designer Arm has reopened the debate about British and European tech companies being scooped up by larger US rivals. The UK's Competition and Markets Authority has also stepped up its scrutiny of tech dealmaking in the past year.

Silverman said that New York-based Etsy was "really aligned with where all the regulatory authorities want to go" because its technology helps individuals and smaller businesses compete with the likes of Amazon.

“We provide a community and a brand to help the Davids to compete on more of a level playing field with the Goliaths out there,” he said.

Depop is hoping to tap Etsy’s expertise in bolstering community safety and scaling internationally, while Etsy hopes to learn from Depop’s mobile expertise and social-media savvy.

"Many of the challenges that we are going through as a business are things that Etsy has gone through before," said Maria Raga, Depop's chief executive. "Etsy has made massive improvements in terms of search and discovery, and this is something that we can definitely learn from."

Etsy will pay about $1.6 billion for Depop, primarily in cash. Silverman said the price was “a multiple that’s consistent with what you’re seeing in the market on a growth-adjusted basis based on gross profit, which is how most investors are viewing the resale ecommerce space right now”.

Depop grew sales faster than rivals Poshmark and ThredUp last year. Its price tag is below that of its closest European competitor Vinted, which was valued at €3.5 billion in a private financing last month, while Poshmark currently trades at a $3.5 billion market capitalisation.

Vestiaire Collective, which focuses on second-hand luxury clothing and accessories, was valued at more than $1 billion when fashion group Kering took a 5 per cent stake earlier this year.


Depop, which will retain its existing offices and management team, had raised about $100 million from venture-capital backers including General Atlantic, Balderton Capital, Creandum, and Octopus Ventures. According to its latest annual report on the UK's Companies House registry, Depop's revenues grew 55 per cent year on year to £21.4 million (€24.9 million) in 2019, but pre-tax losses tripled to £15.5 million.

Shares in Etsy have fallen by more than 10 per cent in the past month, after it warned of “some reopening headwinds”, leading to a “possible deceleration in ecommerce growth” later this year. – Copyright The Financial Times Limited 2021