Etsy acquires UK-based social selling site Depop for $ 1.625 billion in mostly cash deal – TechCrunch
Very big novelty today from Europe in the world of e-commerce. Etsy, the New York-based marketplace where astute designers and those interested in their styles can discover and purchase these products, today announced the acquisition of Depop, a London-based marketplace targeting retailers. Generation Y and Generation Z consumers with a new take on social media. purchases. Etsy pays $ 1.625 billion for the company, in what Etsy describes as a mostly cash deal.
It’s not just Etsy’s biggest acquisition to date – it has made seven other deals but all for well under $ 1 billion – but a huge acquisition for e-commerce in Europe, and also Massive endorsement of companies that build business models, i.e. business models, specifically targeting younger and / or more creative users.
About 90% of Depop users are under the age of 26, which will give Etsy a huge opportunity to both leverage them and their community in Depop itself, but will likely also serve as a gateway to bring in more content and opportunities. Younger buyers at Etsy, which may have started skewing younger, but also has a large number of older users. Etsy is publicly traded and currently has a market cap of over $ 20 billion.
Depop last reportedly raised money in 2019 (a $ 62 million round) and was on a roll at the time, with 13 million users and growing very rapidly in the States. United Today, about two years later, its user count has surpassed 21 million stylists, designers, artists, collectors, vintage sellers and more, with a particularly strong audience in the United States (the largest market Etsy) and its UK home market (which is also strong for Etsy).
This is a volume game for Etsy, but not necessarily profitable initially: Depop in 2020 saw gross merchandise sales of $ 650 million but revenue of just $ 70 million, both up from 100% compared to the previous year.
Depop’s ethics are promising, however, when it comes to how Etsy might develop, particularly as a sort of anti-Amazon in the world of clothing, housewares, and consumer goods shopping. Depop also fits perfectly into many tastes of the moment. 2020 has been a year that has seen not only a huge increase in e-commerce, but also the flourishing of many small businesses and cottage industries as large numbers of people choose to buy locally and support individuals, and to buy more second-hand goods – areas where Depop plays very strong.
“We are just delighted to add Depop, which we believe is the resale home for Gen Z consumers — to the Etsy family. Depop is a dynamic, two-sided marketplace with a passionate community, a highly differentiated offering of unique items, and we believe there is significant potential for expansion, ”said Josh Silverman, CEO of Etsy, Inc. , in a press release. “Depop’s world-class management team and employees have done a fantastic job nurturing this community and driving organic and authentic growth in a way that fits well with Etsy’s DNA and mission. keep human commerce. We see significant opportunities for shared expertise and growth synergies in what will now be a formidable portfolio of distinct and very special e-commerce brands.
Silverman’s track record includes a number of years at eBay as the head of Shopping.com, which is also worth considering when thinking about Etsy’s growth over time.
Depop CEO Maria Raga added, “We are on an incredible journey to make Depop a place where the next generation comes to explore unique fashion and be part of a community that is changing the way we shop. Our community is made up of people who are creating a new fashion system by setting new trends and making new from the old. They come to Depop for the clothes, but stay for the culture. We will now take an exciting leap forward within the Etsy family, benefiting from the expertise of Josh and his team, and the resources of a much larger company whose values are so aligned with ours here at. Depop.
The deal is expected to close in the third quarter of 2021, pending regulatory approval in the US and UK and other closing conditions, and Etsy has said that after the deal closes, it will operate Depop as a separate brand alongside Etsy and Reverb, a marketplace for musical instruments. which it acquired in 2019.
More soon. Refresh for updates.