DepopThe two companies announced Wednesday that the Gen Z-loved fashion resale marketplace will be acquired by Etsy for $ 1.6 billion.
The cash-based deal, which is expected to close by the third quarter of this year, underlines the growing influence of apparel resale platforms. More and more buyers are turning to the secondary market for something cheaper and – potentially – more environmentally friendly as overproduction of clothing increases the number of landfills.
The trend seems to have been fueled by the pandemic, as more shoppers have sought to clean up the clutter of closets, make money selling their old clothes, or start a custom fashion business from their bedrooms.
Investor appetite is also growing. Last month, Europe’s largest fashion marketplace, Vinted, raised 250 million euros in a funding round that valued the startup at € 3.5 billion ($ 4.26 billion), while U.S. companies such as ThredUp and Poshmark went public this year.
Depop, founded in 2011, has been particularly successful in creating a market for young consumers who are embracing secondhand fashion faster than any other group. Ninety percent of its users are under 26, with 30 million users in 150 countries. The platform is especially known for its vintage and streetwear as well as the creation of new cohort of internet influencers known for selling their wares.
“We’re just excited to add Depop – what we believe to be a resale home for Gen Z consumers – to the Etsy family,” said Etsy CEO Josh Silverman.
He said he believes the platform has “significant potential to scale further,” and said he sees “significant opportunities for experience sharing and growth synergies” for Etsy’s apparel sector, which was valued at $ 1 billion last year.
According to the Boston Consulting Group, the global used clothing market is up to $ 40 billion a year, which is about 2 percent of the total apparel market. It is expected to grow 15-20 percent annually over the next five years.
The deal is expected to close in the third quarter of 2021, subject to UK and US antitrust scrutiny.