Craft industry Etsy to buy second-hand fashion software Depop for $1.6 billion

Etsy, the online market place for crafts and vintage items, is buying second-hand fashion app Depop for $1.63 billion since it seeks to grow its customer base and get younger users.

The deal will create “significant opportunities for shared expertise and growth synergies” between the two e-commerce sites as the trend for trading recycled clothing is growing, New York-based Etsy said in a statement on Wednesday. The deal, which is primarily cash, is expected to close in the 3rd quarter.

Depop was set up in 2011 as a good “community-powered marketplace” to buy and sell used manner and has become probably the most popular e-commerce sites, particularly among younger, environmentally conscious customers. About 90 % of Depop’s energetic users are beneath the age of 26 and Depop may be the 10th-virtually all visited shopping site among “Gen Z” consumers in the US, regarding to Etsy, whose typical users have a tendency to be older.

Etsy rose 2.6 % to $167.65 at 9:39 a.m. in New York trading. The stock has declined 5.9 per cent so far this season.

The second-hand market in the US is projected to hit $64bn by 2024 and grow to twice how big is quickly fashion on a worldwide basis. Etsy leader Josh Silverman stated the offer will extend Etsy’s presence in the resale marketplace and allow it to greatly help Depop, an early-stage organization, expand and drive further growth and profitability.

Depop, which includes about 30 million new users across practically 150 countries, will still be based found in London and can operate as a good standalone marketplace work by its existing team. Following a deal, Etsy will have three distinct brands - Etsy, Reverb and Depop.

Maria Raga, ceo of Depop, said people “come to Depop for the clothes, but stay for the way of life” and the business enterprise will take advantage of the “sources of a much larger company whose values are so aligned with ours at Depop”.