Very big information today coming out of Europe in the arena of e-commerce. Etsy, the New York-based marketplace where crafty creators and those interested in their styles can discover and prefer those goods, today announced that it is acquiring Depop, a London-based marketplace targeting millennial and Gen Z patrons with a new take on social shopping. Etsy is paying $1.625 billion for the company, in what Etsy is describing as a mostly cash deal.
This is no longer suitable Etsy’s greatest acquisition to date by some margin — it’s made seven other deals however all for successfully below $1 billion — however a gigantic acquisition for e-commerce in Europe and also a massive endorsement of companies that are building business items, namely commerce items, specifically targeting youthful and/or more creative users.
Some 90% of Depop’s users are below the age of 26, and this will give Etsy a sizeable opportunity both to tap them and their community in Depop itself, however seemingly will also act as a bridge to bringing more reveal material and youthful possibilities to Etsy, which may have started skewing youthful however has also a gigantic need of older users now, too. Etsy is publicly traded and has a market cap of over $20 billion at the second.
Depop last raised money, it appears, in 2019 (a $62 million spherical) and was on a roll at the time, with 13 million users and growing very fast in the U.S. Today, some two years later, its person numbers have grown to over 21 million stylists, designers, artists, collectors, vintage sellers and more, with an especially solid audience in the U.S. (Etsy’s greatest market) and its home market of the U.Okay. (which is also solid for Etsy).
This is a volume game for Etsy, however no longer necessarily an initially profitable one: Depop in 2020 saw inappropriate merchandise sales of $650 million however revenues of fully $70 million, both up 100% on the year before.
Depop’s ethos is a promising one, nonetheless, in phrases of how Etsy may discover itself growing, particularly as a kind of anti-Amazon in the arena of attire, home goods and person goods shopping. Depop also suits squarely into a lot of the tastes of the second. 2020 was a year that saw no longer suitable a gigantic surge of e-commerce, however also the flourishing of a lot of smaller businesses and cottage industries as a swathe of other folks opted to store locally and strengthen individuals, and to prefer more traditional goods — areas where Depop plays very solid.
“We are merely overjoyed to be adding Depop — what we imagine to be the resale home for Gen Z patrons — to the Etsy family. Depop is a vibrant, two-sided marketplace with a passionate community, a highly differentiated offering of strange items, and we imagine significant potential to additional scale,” Josh Silverman, Etsy, Inc. CEO, said in a statement. “Depop’s world-class management team and staff have finished a fantastic job nurturing this community and driving organic, authentic increase in a way that aligns successfully with Etsy’s DNA and mission of Keeping Commerce Human. We discover significant alternatives for shared expertise and increase synergies across what will now be a great ‘home of brands’ portfolio of individually distinct, and very special, e-commerce brands.”
Silverman’s track myth includes a need of years at eBay leading Shopping.com, something also value considering when thinking about how one sees the increase of Etsy over time.
Depop’s CEO Maria Raga added: “We’re on an incredible coast building Depop into a place where the subsequent generation comes to discover strange fashion and be part of a community that’s changing the way we store. Our community is made up of those that are creating a new fashion procedure by establishing new traits and making new from mature. They come to Depop for the garments, however stay for the tradition. 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 distinguished larger company whose values are so aligned with ours here at Depop.”
The transaction is anticipated to shut in Q3 2021, pending regulatory approval in the U.S. and U.Okay. and other closing conditions. Etsy said that after the deal closes, this will operate Depop as a separate brand alongside Etsy and Reverb, a marketplace for musical instruments that it acquired in 2019.
Extra to come. Refresh for updates.