Online retail giant eBay has finalized a landmark agreement to acquire the secondhand fashion marketplace Depop from Etsy for approximately $1.2 billion in cash, as announced by both companies on Wednesday. This strategic acquisition represents eBay's ambitious effort to capture a younger demographic of shoppers and strengthen its position in the rapidly expanding resale market.
A Strategic Move in the Booming Resale Sector
The transaction comes at a pivotal moment when used clothing has surged in popularity, particularly among Generation Z consumers. These younger shoppers are actively seeking unique, affordable items that cost significantly less than new products while simultaneously supporting sustainable fashion practices by keeping older garments out of landfills.
Depop, which maintains its headquarters in London and was originally founded in 2011, is expected to retain its distinctive name, brand identity, platform features, and unique cultural elements following the acquisition. The companies have emphasized that Depop will continue operating as an independent entity within eBay's broader portfolio.
Demographic Appeal and Market Position
According to the joint release issued by both companies, Depop's marketplace boasted an impressive 7 million active buyers as of December 31, 2025, with nearly 90% of these users falling under the age of 34. The platform also supports more than 3 million active sellers, creating a vibrant community-driven marketplace that has become particularly popular among fashion-forward younger consumers.
eBay's Chief Executive Officer, Jamie Ianonne, expressed strong confidence in the acquisition's potential, stating: "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 Strategic Refocus
This transaction marks a significant shift for Etsy, which originally purchased Depop for $1.6 billion five years ago as part of its strategy to build a comprehensive "House of Brands" portfolio. During that period, Etsy was actively acquiring multiple online marketplaces in an effort to compete more effectively against larger e-commerce players like Amazon.
Etsy has since reversed this expansion strategy, choosing instead to divest marketplaces that fall outside its core platform focus. Etsy CEO Kruti Patel Goyal explained the rationale behind the Depop sale on Wednesday, noting: "Selling Depop 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."
Financial Details and Market Reaction
eBay, headquartered in San Jose, California, has confirmed its intention to complete the acquisition using cash reserves. Meanwhile, Brooklyn-based Etsy plans to utilize the substantial proceeds from the sale for general corporate purposes, according to the official release.
The transaction has received unanimous approval from the boards of directors at both eBay and Etsy, with expectations that the deal will formally close during the second quarter of this year. Financial markets responded positively to the announcement, with eBay's shares rising more than 7% and Etsy's stock soaring close to 15% in after-hours trading following the news.
This acquisition represents a significant consolidation within the online marketplace sector, highlighting the growing importance of secondhand fashion and the ongoing competition to capture younger, sustainability-conscious consumers in the digital retail landscape.
