Etsy Inc., the online marketplace for crafts and vintage items, is buying second-hand fashion app Depop for $1.63 billion as it seeks to expand its customer base and attract younger users.
The deal will create “significant opportunities for shared expertise and growth synergies” between the two e-commerce sites as the trend for trading recycled clothing continues to grow, New York-based Etsy said in a statement on Wednesday. The deal, which is primarily cash, is expected to close in the third quarter.
Depop was set up in 2011 as a “community-powered marketplace” to buy and sell used fashion and has become one of the most popular e-commerce sites, particularly among younger, environmentally conscious consumers. About 90% of Depop’s active users are under the age of 26 and Depop is the 10th most visited shopping site among “Gen Z” consumers in the U.S., according to Etsy, whose average users tend to be older.
The second-hand market in the U.S. is projected to hit $64 billion by 2024 and to grow twice the size of fast fashion on a global basis. Etsy Chief Executive Officer Josh Silverman said the deal will extend Etsy’s presence in the resale market and allow it to help Depop, an early-stage business, expand and drive further growth and profitability.
Depop, which has about 30 million registered users across nearly 150 countries, will continue to be based in London and will operate as a standalone marketplace run by its existing team. Following the deal Etsy will have three distinct brands – Etsy, Reverb and Depop.
Maria Raga, chief executive officer of Depop, said people “come to Depop for the clothes, but stay for the culture” and the business will benefit from the “resources of a much larger company whose values are so aligned with ours here at Depop.”