Etsy acquires British fashion app Depop for US$1.6 billion to promote “Gen Z”

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Etsy is acquiring Depp, A second-hand fashion app, priced at $1.6 billion, as the handmade goods market expands its product portfolio to young consumers.

This trend Used to trade vintage or recycled clothing online, Depop helped create a decade ago and has now spawned several billion-dollar e-commerce companies as traditional fashion retailers grapple As consumers’ demand for more ethical and sustainable production practices continues to grow.

More than 90% of Depop’s millions of active users are under the age of 26. This age group is called “Generation Z”, Allowing Etsy to reach a group of people younger than its main consumer group.​​​ Etsy users are usually millennials or older, and the median age of sellers is around 39 years old.

Etsy CEO Josh Silverman (Josh Silverman) said: “In general, the resale market is a huge market, and we think it’s ready for future growth.” “We think Gen Z is The most exciting community in resale.”

London-based Depop was founded in 2011, and its revenue more than doubled last year to $70 million, mainly from sales commissions. Its active network of 4 million buyers and 2 million sellers traded approximately US$650 million worth of goods in 2020.

Depop has also established partnerships with brands including Adidas, Benetton and Ralph Lauren, because fashion retailers want to improve their sustainability capabilities.

“We have the same mission and values,” Silverman said. “We all want to keep business humane. We are all supporting creative entrepreneurs.”

When the acquisition happened, NVIDIA suggested The US$40 billion acquisition of the British-based chip design company Arm has reignited the debate about the acquisition of British and European technology companies by major US competitors. In the past year, the UK Competition and Markets Authority has also strengthened its scrutiny of technology transactions.

Silverman said that Etsy, headquartered in New York, “is very much in line with the goals of all regulators,” because its technology helps individuals and small businesses compete with companies such as Amazon.

“We provide a community and a brand to help Davids and Goliaths compete on a more level playing field,” he said.

Depop hopes to use Etsy’s expertise in strengthening community safety and international expansion, while Etsy hopes to learn from Depop’s mobile expertise and social media knowledge.

“Many of the challenges we are experiencing as a company are those that Etsy has experienced before,” said Maria Raga, CEO of Depop. “Etsy has made tremendous progress in search and discovery, and this is definitely where we can learn.”

Etsy will pay Depop approximately $1.6 billion, mainly in cash. Silverman said that the price is “a multiple that is consistent with the growth adjustments you see in the market based on gross profit. This is how most investors now view the resale e-commerce space.”

Last year, Depop’s sales grew faster than competitors Poshmark and ThredUp.Its price is lower than its closest European competitor wine, Which was valued at 3.5 billion euros in private financing last month, while Poshmark’s current market value is 3.5 billion U.S. dollars.

Vestiaire Collective focuses on second-hand luxury clothing and accessories. When the fashion group Kering acquired 5% of its shares earlier this year, it was valued at more than $1 billion.

Depop will retain its existing office and management team, and has raised approximately $100 million from venture capital supporters including General Atlantic, Balderton Capital, Creandum, and Octopus Ventures.According to its latest annual report on the House of British Companies RegistryIn 2019, Depop’s revenue increased by 55% year-on-year to 21.4 million pounds, but its pre-tax loss tripled to 15.5 million pounds.

Etsy’s stock price has fallen by more than 10% in the past month after it warned that “some headwinds from reopening” led to “a possible slowdown in e-commerce growth” later this year.

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