Etsy, the US-owned artisan marketplace, is to buy the London-based used clothes market Depop for $1.6bn cash. The deal reflects the increasing interest in sustainable clothing as well as changing behaviour during the pandemic. Depop has been described as a social shopping app, a mix of eBay and Instgram. It was founded in 2011 and has a young demographic who are early adopters of secondhand fashion.
It reached revenues of $70m in 2020, trading goods worth $650m.Insider reported this week that it was helping teens get rich: some Depop sellers are believed to earn hundreds of thousands a year from the site.
The brand has 30m users in 90 countries and 90% of their users are Gen Z (under 26 years of age). Etsy CEO Josh Silverman claimed 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 ecommerce space right now”.
Other companies operating in the same space which have raised funds or floated this year include Vinted, ThredUp, and Poshmark, with estimates for the total market reaching $40bn – some 2% of the total clothing market. Clothing rental is also booming. The deal will enable Etsy to access a younger age audience than its own, where the average age is 39.