Last Wednesday, Etsy
The buy-out is expected to close sometime in the third quarter of this year. Once the ink dries, Depop will operate independently, under its current leadership, much like Etsy's other flagship property, Reverb--an online marketplace for unique and used musical equipment.
"Depop is a vibrant, two-sided marketplace with a passionate community, a highly differentiated offering of unique items, and we believe significant potential to further scale," said Etsy's CEO Josh Silverman in a statement. "We see significant opportunities for growth synergies across what will now be a tremendous 'house of brands' portfolio of individually distinct, and very special e-commerce brands."
Founded in 2011, Depop's stated mission is "to build the world's the most diverse and progressive home of fashion." While Depop may sell used clothes, the ideals of its user base are anything but old-fashioned. Ninety percent of 30 million registered users are under the age of 26, and the site ranks as the tenth most popular website among Gen Zers.
Depop's popularity among this much-coveted demographic has undoubtedly paid off; last year, the company boasted $650 million in sales while achieving $70 revenue.
While Etsy may sell vintage clothes, that certainly isn't what makes it famous. Etsy sees in Depop a unique entry point into a budding market for one-off and/or secondhand clothing. It also gives Etsy a way to capture an audience with a much younger, perhaps more Instagramable aesthetic.
Unlike Etsy, Depop works more like a social network. Its sellers build brands for their online shops on Instagram, while often turning to TikTok or Youtube
For Etsy, having a ready-made marketplace crammed with tomorrow's tastemakers certainly won't hurt its efforts to break out into what it calls "the fast-growing resale space." Etsy believes the market for 80s leggings and the purses made of candy wrappers, some of which currently feature on Depop, could become a $64 billion business by 2024.
But for Etsy, the buy-out isn't entirely just about capturing a new market but rather an extension of its efforts to be all things to another distinct set of people. Etsy is perhaps for a slightly more staid crowd of crafters, Reverb is for thrifty musicians, and now Depop will be a place for budding fashionista's the world over. While they may not be for everyone, each of these three separate platforms appeals to a distinct and passionate mix of buyers and sellers, translating into further transaction fees for Etsy.
"These businesses all share similar levers of growth to unlock value," the company said in its statement "the marketplaces will operate independently while benefiting from shared expertise in areas such as product, marketing, technology and customer support."
It's unclear how sellers on either Etsy or Depop will respond to the news. The deal remains subject to anti-trust review both in the U.S. and across the pond, where Depop is headquartered.
Goldman Sachs
