By Titik Puspa 
In a significant strategic maneuver, Etsy announced on Wednesday its sale of Depop, the popular secondhand clothing app favored by Gen Z and millennials, to eBay for a substantial $1.2 billion in cash. This divestment allows Etsy to re-center its efforts and resources squarely on the growth and development of its own expansive marketplace, a move that signals a clear prioritization of its primary business. The transaction marks a notable shift for Etsy, which had acquired Depop just under five years ago, in June 2021, for a reported $1.625 billion, a period when the allure of fashion resale platforms was experiencing a pronounced surge in popularity.
The acquisition of Depop by Etsy in 2021 occurred at a time when the resale market for clothing was not just a trend but a burgeoning industry. Driven by growing consumer consciousness around sustainability and a desire for unique, affordable fashion, platforms like Depop, Poshmark, ThredUp, and The RealReal were rapidly gaining traction. Etsy, recognizing this burgeoning market and Depop’s strong connection with a younger demographic, saw an opportunity to diversify its portfolio and tap into a new customer base. However, the resale landscape has since evolved, with increased competition and changing consumer spending habits, particularly in the wake of the pandemic-induced e-commerce boom.
Depop, founded in 2011, has cultivated a distinct identity as a social-forward marketplace deeply embedded in the pre-loved fashion ecosystem. In 2025, the platform achieved an impressive milestone, generating approximately $1 billion in gross merchandise sales – the total value of all goods transacted through its digital storefronts. The United States market, in particular, showcased robust growth for Depop, with nearly 60% year-over-year expansion. As of December 31, 2025, Depop boasted a vibrant community of seven million active buyers, a testament to its appeal, with an overwhelming majority, nearly 90%, falling within the under-34 age bracket. Complementing this buyer base were over three million active sellers, underscoring the platform’s dynamic supply and demand.
eBay CEO Jamie Iannone expressed strong confidence in Depop’s future under eBay’s stewardship. "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," Iannone stated in the official press release announcing the acquisition. This perspective highlights eBay’s strategic intent to leverage its established infrastructure and vast customer base to further propel Depop’s expansion, particularly within the rapidly growing circular economy. eBay, a pioneer in online marketplaces, has itself been adapting to the evolving retail landscape, and integrating Depop aligns with its efforts to attract younger consumers and expand its presence in niche markets.
This strategic divestment by Etsy comes at a time when the company has encountered challenges in sustaining its high growth trajectory following the extraordinary e-commerce surge experienced during the pandemic. Etsy now finds itself in a more competitive arena, facing formidable rivals such as Temu and Shein, which have rapidly captured significant market share with their aggressive pricing and vast product selections, alongside the omnipresent Amazon. These platforms, with their differing business models and target demographics, present a complex competitive environment for Etsy, which has historically differentiated itself through its focus on unique, handmade, and vintage items.
The financial performance of Etsy has reflected these market pressures. The company reported a year-over-year revenue growth of 2.2% in 2024, a noticeable deceleration from the 7.1% growth recorded in 2023. This slowdown underscores the need for Etsy to refine its strategy and concentrate its efforts on areas where it can achieve sustainable, profitable growth. With its 2025 earnings report slated for release on Thursday, the market will be keenly watching for further insights into the company’s performance and its forward-looking plans.
Etsy CEO Kruti Patel Goyal articulated the strategic rationale behind the Depop sale, emphasizing the renewed focus on its core business. "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," Goyal stated. She further expressed pride in Depop’s accomplishments: "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." This sentiment highlights Etsy’s acknowledgment of Depop’s success while reinforcing its commitment to its primary mission of supporting independent sellers and offering unique goods.
The sale of Depop is not an isolated event but rather the latest chapter in a discernible pattern of Etsy’s strategic acquisitions and subsequent divestitures of niche online marketplaces. This approach suggests a dynamic and iterative strategy for portfolio management, where Etsy explores new market segments and, if they don’t align perfectly with its long-term vision or if they can be better nurtured elsewhere, divests them to concentrate on its core strengths. In recent years, Etsy has pursued a similar path with other acquisitions. Notably, it previously purchased Elo7, a Brazilian e-commerce company specializing in handmade goods, and Reverb, a marketplace for musical instruments. While the specifics of the Elo7 and Reverb divestitures are not detailed in the provided context, their inclusion in this pattern suggests a recurring theme of Etsy testing the waters in specialized markets and then strategically exiting when deemed appropriate for its overall business objectives. This approach allows Etsy to remain agile and adaptable in a rapidly evolving e-commerce landscape.
The financial implications of the Depop sale are significant, providing Etsy with a substantial cash infusion that can be reinvested in its core marketplace. This capital can be deployed towards enhancing the buyer and seller experience, investing in new technologies, expanding marketing efforts, and potentially pursuing strategic acquisitions that are more closely aligned with Etsy’s primary value proposition. The $1.2 billion in cash will undoubtedly provide Etsy with greater financial flexibility as it navigates the competitive pressures and seeks to reignite its growth engine.
The deal is anticipated to be finalized in the second quarter of the current year, subject to customary closing conditions. This timeline suggests that the integration process, while not detailed, will commence shortly thereafter, with eBay taking the reins of Depop’s operations. For Depop users, the transition to eBay ownership is likely to bring both opportunities and potential changes, as eBay integrates its platform and operational strategies.
This transaction is a testament to the evolving dynamics of the e-commerce industry and the strategic decisions made by major players. Etsy’s decision to divest Depop underscores a strategic refinement, a move to sharpen its focus on its core competencies and capitalize on the inherent strengths of its primary marketplace. For eBay, the acquisition of Depop represents an opportunity to tap into a highly engaged, younger demographic and expand its footprint in the rapidly growing sustainable fashion sector. As the retail landscape continues its rapid transformation, such strategic portfolio adjustments will likely remain a key feature of how companies adapt and thrive.
The reporting on this significant transaction was provided by Aisha Malik, a consumer news reporter at TechCrunch. Prior to joining TechCrunch in 2021, Malik covered the telecommunications sector for MobileSyrup. Her academic background includes an honours bachelor’s degree from the University of Toronto and a master’s degree in journalism from Western University, equipping her with a strong foundation for investigative and analytical reporting. Her expertise in consumer technology and market trends makes her a reliable source for insights into the digital economy.