Etsy announced on Wednesday that it is selling Depop, the secondhand fashion marketplace popular with Gen Z and millennials, to eBay for $1.2 billion in cash, marking a strategic retreat from a high-profile acquisition made nearly five years ago.
Etsy acquired Depop for $1.62 billion in 2021, at a time when investor enthusiasm around recommerce platforms was surging. The sale, at a substantial discount to the original purchase price, underscores the evolving dynamics in e-commerce and highlights the challenges Etsy has faced in sustaining growth outside its core marketplace.
Depop, founded in 2011, has become a leading platform for pre-owned fashion, combining peer-to-peer resale with social discovery features that appeal to younger consumers. In 2025, the platform generated approximately $1 billion in gross merchandise sales globally, with nearly 60% year-over-year growth in the United States alone.
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As of the end of 2025, Depop had seven million active buyers — nearly 90% of whom were under the age of 34 — and more than three million active sellers. Its model, blending community engagement and commerce, has positioned it as a differentiated marketplace that resonates with the values of younger generations, particularly around sustainability and the circular economy.
eBay sees the acquisition as an opportunity to strengthen its position in the fast-growing resale sector and to attract younger consumers who have historically been harder for the company to reach. The purchase of Depop complements eBay’s existing marketplace by providing a social-forward platform with strong brand affinity among Gen Z and millennial shoppers.
Analysts note that eBay’s global reach, established payments system, and logistics infrastructure could enable Depop to expand more efficiently outside its existing markets in the U.S. and U.K. and accelerate its monetization strategy. This acquisition also reflects broader trends in the industry, as price-conscious and sustainability-minded consumers increasingly turn to secondhand goods, boosting the appeal of recommerce platforms.
The sale allows Etsy to refocus on its core marketplace, emphasizing handmade, vintage, and personalized goods. The company’s growth has slowed in the post-pandemic e-commerce environment, with revenue rising just 2.2% in 2024 compared to 7.1% in 2023, as competition from marketplaces like Temu, Shein, and Amazon intensified.
CEO Kruti Patel Goyal framed the transaction as a strategic move to concentrate on the “compelling opportunity” within Etsy’s primary marketplace. The sale is consistent with Etsy’s previous pattern of acquiring niche platforms during periods of growth and later divesting them to refocus resources, as seen with the acquisition and subsequent sale of Brazil-based Elo7 and musical instrument marketplace Reverb.
Financially, the sale provides Etsy with a significant cash infusion that could be deployed toward reinvesting in core operations, reducing debt, or executing share repurchases. While the lower valuation compared to the original purchase price may raise questions about capital allocation during the e-commerce boom, it also allows Etsy to sharpen its strategic priorities and streamline operations.
The acquisition represents a bet on the continued rise of recommerce and eBay’s potential to modernize its brand, attract a younger demographic, and integrate social commerce features into its broader platform.
The deal is expected to close in the second quarter of 2026, subject to customary regulatory approvals. Observers note that the transaction exemplifies the ongoing recalibration in digital commerce, as platforms that expanded rapidly during the pandemic reassess profitability, growth, and market fit.
Depop’s integration into eBay will serve as a key test of whether a younger, socially-driven marketplace can be scaled effectively within a larger, established e-commerce ecosystem while sustaining engagement and growth amid a more competitive and price-conscious retail market.