This week, Brooklyn-based e-commerce platform Etsy placed a bet of $1.6 billion to acquire London-based peer-to-peer second-hand fashion app Depop in a cash deal expected to close in the third quarter of this year.
This merger makes sense. The two companies have complementary audiences. The average Etsy user skews Millennial, while Depop draws a Gen-Z audience. According to the Business of Fashion, in 2020 about 90 percent of active monthly users on Depop were under the age of 26. Moreover, the platform has strong mobile and social media presence from which Etsy could benefit.
But the merger wouldn’t only serve Etsy’s development. To Depop’s Etsy brings international and community management expertise. Yet the biggest benefit of this strategic acquisition is scale. Deep-pocketed Etsy has the heft to help Depop forge ahead in a fast-growing but crowded and highly competitive fashion resale market.
We can expect future deals between platforms with complementary demographics. Who knows what the future of the resale market will bring – Vinted + Vestiare Collective or The RéalReal + Tradesy Place your bets.