Etsy Acquires Depop for $1.6B in Gen-Z Push

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By Published On: June 3, 20210 Comments

Etsy is acquiring re-commerce marketplace platform, Depop, for $1.6 billion, and is aiming to utilise the C2C marketplace to deepen its reach to the Next Gen shopper.


  • Etsy has acquired Depop for $1.6 billion
  • Depop is a Gen-Z skewed online marketplace with 90 percent of its users under 26
  • Depop is the 10th-most visited shopping site amongst Gen Z shoppers in the US.
  • Etsy will utilise Depop’s understanding of Gen Z to deepen its own reach of customers

Etsy, the online marketplace that was established in 2005, and aims to increase its visibility with Gen Z shoppers, who have flocked to Depop in the last 18 months. The C2C marketplace is famously aligned with Gen Z shoppers, which acts as a social media platform that lets users ‘like’ the products they’re interested in purchasing.

Depop was established in 2011 by Simon Beckerman in Italy and currently has headquarters in London, and offices in Milan, London, LA and NYC. This is another example of the push for re-commerce and online second-hand retail marketplaces. Earlier in 2021, online retailer Poshmark entered the Australian market after going public in the US.

Read more: The New Age of Social Shopping with Depop

The Generation Gap

Over the course of the pandemic, Depop has recorded 100 percent YoY growth reporting revenue of $70 million during 2020. The app has more than four million buyers and two million sellers, generating approximately $650 million in 2020 alone.

“We know that the next generation want an experience that the fashion industry is struggling to provide. They want authenticity and to set their own trends,” explained Maria Raga, the CEO of Depop told us in 2020. “They’re influenced by real people. They want choice and individuality, the ability to buy on-demand and sell on with ease. At the same time, they want to reduce waste. Depop is set up to meet these changing demands. We exist to empower the next generation to transform fashion.”

Depop is famously loved by younger shoppers who enjoy vintage and second-hand goods. In fact, over 90 percent of Depop users are under the age of 26, making it the perfect breeding ground for Etsy and their plan to align further with the Next Gen shopper.

As the majority of shoppers on the app are under 26, Etsy is on a mission to reposition itself to reach a new target audience. In contrast, Etsy is famously aligned with ‘Millennials’ or older shoppers – the median age of users on the platform are typically 39, with approximately 90 million active buyers. Depop has established itself as a mobile-first platform, with its user experience focussed heavily on its app and community-building features online.

“The resale market, in general, is a massive market that we think is well-positioned for growth well into the future,” said Josh Silverman, the CEO of Etsy. “We think Gen Z is the most exciting community within resale.”

Read more: What is Poshmark and Is It the Future of Online Fashion Retail?

The Re-Sale Boom

We’ve made it no secret that we’re currently experiencing a ‘vintage renaissance‘. Retailers, online marketplaces and C2C platforms such as Vestiaire Collective, Poshmark, TheRealReal and many others are booming in popularity.

Earlier this year, Kering – the second-largest Luxury Fashion house that owns brands like Gucci, Alexander McQueen and Saint Laurent – took a five percent stake in Vestiaire Collective. This shot up the retailer’s valuation to more than $1 billion.

Younger shoppers have demonstrated time and time again that they are more interested in purchasing from brands that align with their ethical and social values. Research from Voxburner found that 23 percent of Gen Z shoppers have boycotted a brand entirely if the retailer didn’t align with their values, or take action in a cause that they’re interested in or follow. The acquisition aims to ‘deepen’ the platform’s reach of Gen Z shoppers, with “differentiated brand strength, strong user engagement and unit economics”, Etsy said in a statement.

The Acquisition

Etsy will acquire Depop for $1.6 billion – primarily in cash – with Silverman explaining that 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 e-commerce space right now.”

In a statement released by Etsy, Depop aligns with multiple areas of its criteria, including sharing its DNA with a “parallel growth strategy that highlights sellers’ unique merchandise by improving search and discovery, driving human connections, and building marketplace trust,” the retailer shared.

“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,” shared Raga. “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.”

Depop has experienced faster growth than its rivals, Poshmark and ThredUp, in the last 12 months. The retailer has received about $100 million in backing from venture capitalist firms including General Atlantic, Creandum and Octopus Ventures among others. In contrast, Etsy’ shares have fallen more than 10 percent in the last month. The retailer has also warned that it may be experiencing headwinds as a result of ‘possible deceleration of e-commerce growth’ later this year.

However, this acquisition may be the ticket it needs to boost the growth it needs. “We’ve admired Depop for a while, and are excited to have now reached an agreement to purchase this fantastic business – a company we believe is still in the early innings of its growth opportunity,” shared Rachel Glaser, the CFO of Etsy. “We love Depop’s rapidly growing GMS and loyal and engaged customer base, excellent user engagement and unit economics, opportunities to expand value-added seller services, clear path for geographic expansion, and highly scalable, ‘capital light’ operating model. We’re excited to build a ‘house of brands’ where the whole is greater than the sum of its parts.”

The acquisition is set to be completed by the third quarter of 2021. Etsy currently has $2 billion in total liquidity, consisting of $1.8 billion in cash, cash equivalents and short and long term investments on its balance sheet. The Depop team will remain in their London office and retain their staff as they move forward. Since the announcement of the acquisition, Etsy’s shares have increased by 11.68 points (7.14 percent) to USD175.14.

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