The takeover will allow the marketplace to enter a new used clothing market, which is currently experiencing a rapid growth stage.
Today, the Depop platform, focused mainly on mobile device owners, boasts 30 million registered users from 150 countries around the world. At the same time, 4 million of them are active buyers. The number of active sellers reaches 2 million. In 2020, sales were $650 million, generating $70 million in revenue for the company.
The deal is reportedly worth $1.63 billion. The takeover will provide Depop with an opportunity for further growth. At the same time, from a legal point of view, little will change for the company. It will continue to be headquartered in London and will continue to operate as a standalone marketplace.
The takeover of Depop will allow Etsy enter the rapidly growing clothing resale market. According to research conducted by the ThredUp platform working in this direction, by 2024 the volume of this market will reach $64 billion. Similar numbers follow from an independent study by Etsy, which shows that in the next three years, sales of second-hand clothing will surpass sales of items belonging to the fast fashion category.
Etsy CEO Josh Silverman said the platform is especially popular with Gen Zers. The acquisition of Depop will allow the company to become "a huge home for brands," expanding its reach while maintaining the identity that makes Etsy so compelling to visitors. Silverman also adds that he is very surprised that big retailers like Gap or Macy's didn't make such an acquisition "a long time ago".
This is not the first Etsy purchase of this kind. In 2019, the marketplace acquired Chicago-based platform Reverb, which specializes in the sale of mostly second-hand music equipment. Then the deal amounted to 275 million dollars. This allowed Etsy to expand into new markets and get one step closer to big competitors like Amazon и eBay.