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Etsy buys British app Depop for $ 1.6 billion

Etsy buys British app Depop for $ 1.6 billion

Etsy is buying Depop, the second-hand clothing app, for $ 1.6 billion as the handmade goods market expands its portfolio to new consumers.

Depop (app) helped the trend of selling the clothes you have in the closet that you no longer love, on the Internet, a decade ago. Today there are several multibillion-dollar e-commerce companies offering the same service as Depop, while clothing retailers are facing increasing consumer demand for environmentally friendly and animal-friendly practices. In short, recycling and reusing clothing is more fashionable than buying in retail stores.

More than 90 percent of the millions of active Depop users are under the age of 26, an age group known as "Generation Z," giving Etsy access to a newer demographic than its main consumer base. Etsy users are typically in their 30s.

Depop boosted sales faster than rivals Poshmark and ThredUp last year.

Vestiaire Collective (another well-known second-hand clothing brand in America), which focuses on luxury clothing and accessories used, was valued at more than $ 1 billion when the Kering fashion group took a 5 percent stake. percent at the beginning of this year.

Depop, which will maintain its existing offices and management team, had raised about $ 100 million from venture capital supporters including General Atlantic, Balderton Capital, Creandum and Octopus Ventures. According to the year-end report on the UK House of Companies register, Depop revenue grew 55 per cent year-on-year to 21 21.4 million in 2019, but pre-tax losses tripled to 15 15.5 million.

"The resale market in general is a massive market that we think is well positioned for future growth," said Etsy chief executive Josh Silverman. "We think Gen Z is the most exciting community within the resale."

Revenue from London-based Depop, which was founded in 2011 last year, has reached $ 70 million, mostly from sales commissions. Its active network has about 4 million buyers and 2 million sellers.

Depop has also partnered with brands including Adidas, Benetton and Ralph Lauren, as fashion retailers seek to boost their credentials, or sustainable fashion.

"Financial Times" article adapted for Tiranapost by Stela Sallaku