Etsy Divests Depop to eBay
Etsy has announced a significant strategic move, agreeing to sell the popular secondhand clothing marketplace Depop to eBay for $1.2 billion in cash. This transaction, revealed on Wednesday, is intended to allow Etsy to sharpen its focus on its core marketplace operations. The deal follows Etsy's acquisition of Depop nearly five years ago for $1.62 billion, a period when the popularity of resale apps was rapidly escalating.
Depop's Growth and User Base
Founded in 2011, Depop has demonstrated substantial growth, reporting approximately $1 billion in gross merchandise sales in 2025. The United States market saw nearly 60% year-over-year expansion for the platform. As of December 31, 2025, Depop boasted seven million active buyers, with a significant majority, nearly 90%, under the age of 34. The platform also supported over three million active sellers.
Strategic Rationale from eBay
eBay's CEO, Jamie Iannone, expressed enthusiasm for the acquisition, stating in a press release, "Depop has built a trusted, social-forward marketplace with strong momentum in the pre-loved fashion category, and we are confident that as part of eBay, Depop will be even more well-positioned for long-term growth, benefiting from our scale, complementary offerings, and operational capabilities."
Etsy's Shifting Strategy
This divestiture occurs as Etsy navigates a more competitive e-commerce landscape, particularly following the surge in online shopping during the pandemic. The company faces considerable competition from players like Temu, Shein, and Amazon. Etsy's recent financial performance shows a slowdown in growth, with year-over-year revenue increasing by 2.2% in 2024, a decrease from the 7.1% growth reported in 2023. Etsy is slated to release its 2025 earnings on Thursday.
Focus on Core Business
Etsy CEO Kruti Patel Goyal highlighted the strategic benefit of the sale, noting, "We are excited that this transaction allows us to focus exclusively on the compelling opportunity we see in front of us: to grow the Etsy marketplace in ways that matter most to our buyers and sellers." She further added, "We are proud of what the Depop team has built – a truly differentiated brand and product, grounded in clear purpose and strong community – becoming one of the fastest-growing fashion resale marketplaces in the U.S. I am confident that Depop is well-positioned for its next phase of growth as part of eBay."
Pattern of Acquisitions and Divestitures
The sale of Depop is consistent with a broader pattern observed at Etsy, which has involved acquiring and subsequently divesting niche online marketplaces. In recent years, Etsy has also purchased and sold platforms such as the Brazilian e-commerce company Elo7 and the musical instrument marketplace Reverb. The current transaction is anticipated to finalize in the second quarter of the year.
Stay Tuned to Devignitor Insights for More Updates
