Marketplace for kitschy and creative DIY goods, Etsy recently announced that it is acquiring Depop, a hippy and thrifty marketplace for resale goods, for US$ 1.6B, the most expensive deal for Etsy to date. The buyout is expected to close during the third quarter of 2021.
Reason behind the acquisition: Explaining the rationale behind the purchase of Depop, Etsy said that it will help the company reach a younger audience because 90% of Depop’s users are younger than 26 years old. The takeover will help Etsy to attract gen Z customers while the main audience of the marketplace is millennials.
The company had previously acquired Reverb for US$ 275M and got many new customers, who mostly first came to its site to buy masks. Etsy claims that between 2019 and 2020, its revenue rose 111% to US$ 1.7B and net profit rose 264.2% to US$ 349M.
Nowadays, resale apps are finding it difficult to attract sellers to their platform. This is happening with subsidized delivery services on the one hand and paid marketing on the other. The Etsy and Depop deal would allow both companies to close the difficult issues for large resale venues and facilitate a seamless exchange between sellers and customers.
Founded in 2011 by Simon Beckerman, Depop is a London-based company that targets millennial and Gen Z shoppers. It is the fashion marketplace where the next generation buy, sell and get inspired. Apart from London, the company has offices in Manchester, New York, Los Angeles and Australia. They have more than 21 million registered users in 147 countries. Within a span of two years, Depop has grown its user base of stylists, designers, artists and vintage sellers from 13 million to 21 million. It claims that around 90% of its users are under the age of 26.
Founded in 2005 by Chris Maguire, Haim Schoppik, Jared Tarbell and Robert Kalin, Etsy is an e-commerce site and a smartphone application for buying and selling handmade and vintage items. It offers a broad range of categories like clothing and accessories, jewellery, craft supplies and tools, art, entertainment, home and living and much more. The company is headquartered in Brooklyn, New York.
“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. 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.” — Josh Silverman, CEO of Etsy.
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