Etsy to buy fashion resale app Depop for $1.63 billion

Brooklyn, New York-based Etsy posted strong first-quarter earnings of $144 million, or 10 cents for every share, on revenues of $550.65 million.



Etsy Inc. agreed on Wednesday to buy youth-focused clothing marketplace Depop for around $1.63 billion in a bid to change the customer demographics of the online.  

Etsy said London-based Depop, which handles around $650 million in gross merchandise sales a year, is one of the main ten most visited apps by “Gen Z’ consumers, with 90% of its active users younger than 26. The average Etsy user is around 39 years of age, a large portion of which are women in the United States.

“We are simply thrilled to be adding Depop—what we believe to be the resale home for Gen Z consumers—to the Etsy family. Depop is a vibrant, two-sided marketplace with a passionate community, a highly-differentiated offering of unique items, and we believe the significant potential to further scale,” said CEO Josh Silverman.

Etsy Depop acquisition

Etsy will pay about $1.6 billion for Depop in cash. Silverman

“Depop’s world-class management team and employees have done a fantastic job nurturing this community and driving organic, authentic growth in a way that aligns well with Etsy’s DNA and mission of Keeping Commerce Human.”

“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, ecommerce brands,” he added.

Brooklyn, New York-based Etsy posted strong first-quarter earnings of $144 million, or 10 cents for every share, on revenues of $550.65 million. The group estimates gross merchandise sales of $2.8 billion to $3.1 billion for the current quarter.

Etsy CEO Silverman revealed to TheStreet’s founder, Jim Cramer that habitual buyers on the platform were up 200% from a year ago, adding that the group is seeing a ton of interest in gardening and outdoor products as the pandemic comes to an end.

Etsy will pay about $1.6 billion for Depop in cash. Silverman said acquisition 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”.

Depop grew sales faster than rivals ThredUp and Poshmark last year. Its price tag is way below that of its European rival Vinted, which was valued at €3.5 billion in a private financing a month ago, while Poshmark trades at a $3.5 billion market capitalization.

Etsy shares have fallen by more than 10% in the previous month, after it warned of headwinds, leading to a slow-growth in eCommerce later this year.

rblfmr / Shutterstock.com

Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Ticketing app Dice raises $122 million from SoftBank and ex Apple veteran

Ticketing app Dice raises $122 million from SoftBank and ex Apple veteran

Dice is looking forward to expand more after its latest funding round raised $122 million, led by Tony Fadell.
8 hours ago
The chip shortage is a ‘short-term’ problems, says Elon Musk

The chip shortage is a ‘short-term’ problems, says Elon Musk

The CEO’s outlook is far more optimistic than other automotive industry leaders who believe it may last up to 2023-24.
2 days ago
Supply chain crisis bad news for automotive industry leaders

Supply chain crisis bad news for automotive industry leaders

The world’s biggest car companies are on track to lose production of 7.7 million vehicles in 2021. The forecast advices automakers on supply chain and other issues.
5 days ago
Scammers dupe Apple fans with free bitcoin lure

Scammers dupe Apple fans with free bitcoin lure

Savvy scammers used a fake event stream, a fake Apple website, and the promise of free bitcoin to lure fans into opening up their wallets.
6 days ago
Japan’s MUFG offloads Union Bank to U.S. Bancorp for $7.3 billion

Japan’s MUFG offloads Union Bank to U.S. Bancorp for $7.3 billion

The total amount of cash to be received as part of MUFG Union Bank’s sale to Bancorp is $7.3 billion (800 billion yen).
1 week ago
Evergrande: A black swan event that could spook markets

Evergrande: A black swan event that could spook markets

EverGrande is now known as the “world’s most indebted property developer” and serves as a symbol of corporate excess.
1 week ago