Etsy are to massively broaden their appeal to Gen Z fashion consumers with the acquisition of the Depop fashion app marketplace for $1.625 billion. Depop significantly grows Etsy’s GMS in the apparel sector, which was ~$1 billion in 2020. Depop is primarily known for its vintage, streetwear, one-of-a-kind and Y2K (late 1990s/early 2000s) fashion, so if you are an apparel seller take note and consider jumping on board with both Etsy and Depop!
The Depop fashion app will continue to operate independently alongside Etsy and their other brand Reverb, but benefit from shared expertise in areas such as product, marketing, technology, and customer support.
Depop is a community-powered marketplace to buy and sell unique fashion, with a mission to build the world’s most diverse and progressive home of fashion. Depop’s 2020 gross merchandise sales (GMS) were ~$650 million with revenue of $70 million over 100% year-over-year. Depop’s GMS grew at a compounded annual growth rate of nearly 80% from 2017-2020. Etsy believes Depop has a highly differentiated position in the fast-growing resale space citing:
- Approximately 90% of Depop’s active users are under the age of 26; and young consumers are adopting second-hand fashion faster than any other audience
- According to Depop’s monthly brand awareness surveys, it has high prompted awareness for the Gen Z demographic within the resale sector
- Depop is the 10th most visited shopping site among Gen Z consumers in the US
“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 significant potential to further scale. 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.”
– Josh Silverman, CEO, Etsy
The Depop fashion app has a community of approximately 30 million registered users across nearly 150 countries, with 4 million active buyers and 2 million active sellers in 2020. In 2020, 75% of GMS was from existing cohorts; ~75% of sellers were also buyers; and, on average, sellers sold approximately 10 items and buyers bought approximately 6 items.
“We’re on an incredible journey building Depop into a place where the next generation comes to explore unique fashion and be part of a community that’s changing the way we shop. Our community is made up of people who are creating a new fashion system by establishing new trends and making new from old. They come to Depop for the clothes, but stay for the culture. We’ll now take an exciting leap forward as part of the Etsy family, benefiting from Josh’s and his team’s expertise, and the resources of a much larger company whose values are so aligned with ours here at Depop.”
– Maria Raga, CEO, Depop
“We’ve admired Depop for a while, and are excited to have now reached an agreement to purchase this fantastic business – a company we believe is still in the early innings of its growth opportunity. We love Depop’s rapidly growing GMS and loyal and engaged customer base, excellent user engagement and unit economics, opportunities to expand value added seller services, clear path for geographic expansion, and highly scalable, ‘capital light’ operating model. We’re excited to build a ‘house of brands’ where the whole is greater than the sum of its parts.”
– Rachel Glaser, CFO, Etsy