E-commerce marketplace Etsy has agreed to acquire UK-based second-hand fashion app Depop in a $1.625bn deal.
Founded in 2011, Depop is a mobile-first marketplace that allows users to sell and buy new and used streetwear.
The platform, which mainly attracts people aged 26 years and under, is the tenth most visited shopping site among ‘Generation Z’ consumers in the US.
Last year, the business registered gross merchandise sales of around $650m and revenue of $70m.
The deal is expected to close in the third quarter of this year subject to satisfaction of customary closing conditions, including antitrust reviews in the US and UK. Completion of the deal will also depend on ‘certain adjustments’.
Following the acquisition, Depop will operate as a standalone marketplace and continue to be managed by its existing leadership team. The business will maintain its headquarters in London, England.
Etsy CEO Josh Silverman said: “Depop is a vibrant, two-sided marketplace with a passionate community, a highly-differentiated offering of unique items and, we believe, significant potential for 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 e-commerce brands.”
Depop CEO Maria Raga said: “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, benefitting from Josh [Silverman] and his team’s expertise and the resources of a much larger company whose values are so aligned with ours here at Depop.”
Upon completion of the deal, Etsy will operate three e-commerce brands, including Etsy, Reverb and Depop, independently.
Goldman Sachs acted as the exclusive financial advisor to Etsy in relation to the deal, while Deloitte acted as due diligence advisors.
In April, US-based athletic apparel company Lululemon revealed plans to launch its first re-commerce programme, Lululemon Like New.
The programme will allow customers to trade in their ‘gently used’ Lululemon clothing at more than 80 of the company’s participating stores. They can also send in the clothing via post in exchange for an e-gift card.