Etsy targets Gen Z fashionistas with $1.6bn Depop takeover
Etsy is buying second-hand fashion resale platform Depop for $1.6bn (£1.1bn) as it looks to attract younger shoppers.
London-based Depop, which was founded in 2011, has become wildly popular among Gen Z shoppers, with more than 90 per cent of its users under the age of 26.
Last year the company booked gross revenue of $70m in 2020 — double the previous year.
Etsy, whose platform focuses on handmade and vintage products, said it believed Depop had a “highly differentiated position” in the rapidly growing resale emarket.
“We are simply thrilled to be adding Depop — what we believe to be the resale home for Gen Z consumers — to the Etsy family,” said Etsy chief executive Josh Silverman.
“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, which has inked partnerships with brands including Ralph Lauren, has cashed in on the trend towards second-hand clothes among younger consumers conscious of the environmental impact of fast fashion.
Its platform now has around 30m registered users in across nearly 150 countries.
“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,” said chief executive Maria Raga.
“Our community is made up of people who are creating a new fashion system by establishing new trends and making new from old.”
Etsy said the second-hand market was projected to grow at a 39 per cent compound annual growth rate in between 2019 and 2024 to reach $64bn and to grow to twice the size of fast fashion on a global basis.
The deal, which will be funded primarily by cash, comes amid growing scrutiny about the sale of British tech companies to larger US rivals.
The government has opened a national security review into Nvidia’s proposed $40bn takeover of chipmaker Arm, while the competition watchdog has also opened a probe into the deal.
Etsy said it will keep Depop’s headquarters in London and the platform will operate as a standalone marketplace run by its existing leadership team.
The deal is expected to complete in the third quarter this year.