Ebay buys Depop for $1.2bn as it targets younger shoppers

(Sharecast News) - Online auction and sales platform eBay tapped into growing demand from younger shoppers for secondhand fashion with a $1.2bn cash deal to buy marketplace Depop from Etsy.

London-based Depop, founded in 2011, was expected to keep its name, brand, platform and its culture, the companies said in a statement overnight.

"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," said eBay chief executive Jamie Ianonne.

Used clothing has become increasingly popular among younger shoppers who have become more cost-conscious and are more aware of the environmental impact of sending used clothes to landfill. Ianonne said eBay hoped to "reach a younger demographic across the expanding re-commerce landscape".

Depop's marketplace had 7 million active buyers by the end of last year, of whom nearly 90% were under the age of 34, and more than 3 million active sellers, both companies said in a statement.

Etsy bought Depop for $1.6bn in 2021 as it tried to build a group of online marketplaces but has since pivoted, selling off assets outside its main operation.

Selling Depop "allows us to focus exclusively on the compelling opportunity we see in front of us", said Etsy boss Kruti Patel Goyal. The company will use the proceeds for general corporate purposes.

The deal is expected to close in the second quarter, the companies said.

Etsy shares surged to a 15% gain in after-hours trading when the news was announced, while EBay shares rose 6%.

Reporting by Frank Prenesti for Sharecast.com