Etsy is strategically shifting its focus, announcing the sale of its secondhand fashion marketplace, Depop, to eBay for approximately $1.2 billion in cash. The move signals a recalibration for Etsy as it navigates a changing e-commerce landscape and increased competition from platforms like Amazon, Temu, and Shein. The deal, announced on Wednesday, is expected to close in the second quarter of this year, according to a press release from both companies.
The sale marks a significant turn for Etsy, which acquired Depop nearly five years ago for $1.62 billion. At the time, the acquisition was intended to bolster Etsy’s reach with younger consumers drawn to Depop’s social-forward, mobile-first platform. However, Etsy now aims to concentrate its resources on its core marketplace, believing it presents the most compelling growth opportunity.
Depop, founded in 2011, has develop into a popular destination for Gen Z and millennial shoppers seeking unique and pre-loved fashion items. In 2025, the platform generated approximately $1 billion in gross merchandise sales (GMS), representing nearly 60% year-over-year growth in the U.S. As of December 31, 2025, Depop boasted seven million active buyers, with roughly 90% under the age of 34, and over three million active sellers, as detailed in the Wall Street Journal.
eBay CEO Jamie Iannone expressed confidence in Depop’s potential within the eBay ecosystem. “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 press release.
Etsy’s Shifting Strategy and Financial Performance
The decision to sell Depop reflects a broader trend within Etsy of streamlining its portfolio and focusing on its core strengths. In recent years, Etsy has divested other acquired marketplaces, including Brazilian e-commerce company Elo7 and musical instrument marketplace Reverb, as reported by CNBC. This pattern suggests a move away from a “house of brands” strategy towards a more concentrated approach.
Etsy’s financial performance has too played a role in this strategic shift. Although the company experienced significant growth during the pandemic-era e-commerce boom, that momentum has slowed. Year-over-year revenue growth in 2024 was 2.2%, a decrease from the 7.1% growth reported in 2023. Etsy is scheduled to release its 2025 earnings on Thursday, which will provide further insight into the company’s current financial position.
“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,” said Etsy CEO Kruti Patel Goyal. “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.”
The Resale Market and eBay’s Expansion
The acquisition of Depop positions eBay to capitalize on the growing resale market, particularly among younger consumers. Fashion represents over $10 billion in annual gross merchandise volume (GMV) for eBay and delivered 10% year-over-year GMV growth in the U.S. In 2025, according to the press release. By integrating Depop’s social-forward platform and engaged user base, eBay aims to further strengthen its presence in this segment.
The deal also highlights the increasing interest in the secondhand market as a sustainable and affordable alternative to traditional retail. Platforms like Depop and ThredUp have gained popularity in recent years, driven by growing consumer awareness of environmental and ethical concerns related to fast fashion.
Looking ahead, the successful integration of Depop into eBay will be crucial. The second quarter of this year will be a key period as the companies work to combine their operations and leverage their respective strengths. The outcome of this acquisition could significantly impact the competitive landscape of the online resale market and shape the future of e-commerce for Gen Z and millennial shoppers.
What are your thoughts on the acquisition? Share your comments below and let us know how you think this will impact the future of online resale.
