Etsy buys British Depop fashion app for $ 1.6 billion with Gen Z drive

Etsy acquires Depopulate, a second-hand fashion app for $ 1.6 billion as the handicraft market expands its portfolio for young consumers.

In: trend The vintage or recycled clothing retailer that helped Depop pioneer a decade ago has now grown into multibillion-dollar e-commerce companies as traditional fashion retailers. to catch with a growing consumer demand for greater ethical, sustainable manufacturing practices.

More than 90% of Depop’s millions of active users are over the age of 26, an age group known as Generation Z, Making Etsy accessible to a younger demographic than its core consumer base. Etsy users are usually millennia old or older, with an average seller age of about 39 years.

“Overall, the resale market is a mass market that we believe is in a good position for future growth,” said Etsy CEO osh osh Silverman. “We think Gen Z is the most exciting reseller community.”

Founded in 2011 in London-based Depop, revenue more than doubled last year to $ 70 million, mostly from sales commissions. Its active network of 4 million buyers և 2 million sellers in 2020 sold products worth about $ 650 million.

Depop has also partnered with brands such as Adidas, Benetton and Ralph Lauren as fashion retailers want to increase their credibility.

“We share the same mission, we share the same values,” Silverman said. “It simply came to our notice then. We both support creative entrepreneurs. ”

Charging occurs when Nvidia suggested: In the United Kingdom, chip designer Arm, worth $ 40 billion, has reopened the debate over the launch of British-European technology companies by larger US competitors. Over the past year, the UK’s Competitive Markets Authority has also stepped up its scrutiny of technology deals.

Silverman said Etsy, based in New York, was “really right where all the regulators want to go” because its technology helps individuals և compete with small businesses like Amazon.

“We provide a community և brand to help Davids compete more equitably with the Goliaths there,” he said.

Depop hopes to use Etsy’s experience to promote community security on an international scale, while Etsy hopes to learn from Depop’s mobile experience և social media wisdom.

“Many of the challenges we face as a business are the things that Etsy has gone through,” said Maria Ragan, CEO of Depot. “Etsy has made massive improvements in search և detection, և this is something we can definitely learn from.”

Etsy will pay about $ 1.6 billion for Depop, mostly in cash. Silverman said the price is “multiple, which is in line with everything you see in the market based on adjusted gross profit – that’s how most investors view the e-commerce space right now.”

Depop’s sales grew faster than last year’s rivals Poshmark և ThredUp. Its price is lower than its closest European competitor Bloody, which last month was valued at € 3.5 billion in private equity, while Poshmark traded with a market capitalization of $ 3.5 billion.

The Vestiaire Collective, which focuses on second-hand luxury clothing accessories, was valued at more than $ 1 billion when the Kering fashion group acquired a 5% stake earlier this year.

Depop, which will maintain its current offices և management team, has raised about $ 100 million from venture capital sponsors, including General Atlantic, Balderton Capital, Creandum և Octopus Ventures. According to its latest annual report on the UK House of Companies Registry:Depop’s revenue grew 55% year-on-year to ,4 21.4m in 2019, but pre-tax losses tripled to ,5 15.5m.

Shares of Etsy have fallen more than 10 percent in the past month after warning of “slightly recurring winds” leading to a “possible slowdown in e-commerce growth” later this year.

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