Etsy, Inc. (NASDAQ: ETSY) announced plans to buy fashion resale marketplace Depop for US$1.6bn ($1.4bn).
Founded in 2011, Depop is a peer-to-peer platform that allows users to buy and sell their own garments, with 90% of its active users under the age of 26.
Young people are increasingly turning away from fast fashion in favour of second-hand clothing, which is more sustainable and cheaper.
In fact, the second-hand market is projected to grow at 39% annually from 2019 to 2024 in the US alone, reaching US$64bn.
“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 chief executive Josh Silverman.
“We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous ‘house of brands’ portfolio of individually distinct, and very special, e-commerce brands.”
Depop is based in the UK but has expanded in the US and Australia, and now has 30mln registered users across nearly 150 countries.
Last year, its gross merchandise sales (GMS) and revenue were US$650mln and US$70mln respectively, both rocketing 100% compared to 2019 figures.
The transaction, funded mostly with cash, is expected to complete during the third quarter of 2021.
Depop will continue to be headquartered in London and operate as a standalone marketplace run by its existing leadership team.
Shares in Etsy were flat at US$163.40 in premarket trading.
Story by ProactiveInvestors
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