Etsy officially announced on Wednesday the sale of its secondhand clothing marketplace, Depop, to eBay for $1.2 billion in cash. This strategic divestment allows Etsy to pivot its resources toward strengthening its core marketplace operations amidst a highly competitive e-commerce landscape.
A Shift in Corporate Strategy
The transaction marks a significant reversal for Etsy, which acquired the Gen Z-focused fashion app nearly five years ago for $1.62 billion. As Etsy faces mounting pressure from rivals such as Temu, Shein, and Amazon, the company is narrowing its focus. Recent financial reports underscore this challenge, with Etsy’s year-over-year revenue growth slowing to 2.2% in 2024, down from 7.1% in 2023.
“This transaction allows us to focus exclusively on the compelling opportunity to grow the Etsy marketplace in ways that matter most to our buyers and sellers,” said Etsy CEO Kruti Patel Goyal. The company is set to release its full 2025 earnings report this Thursday.
Depop’s Performance and Market Reach
Despite the sale, Depop remains a powerhouse in the resale sector. Founded in 2011, the platform generated approximately $1 billion in gross merchandise sales throughout 2025. Its growth trajectory is particularly strong in the U.S., where it recorded nearly 60% year-over-year growth.
As of December 31, 2025, Depop boasted a robust user base of seven million active buyers—90% of whom are under the age of 34—supported by over three million active sellers.
The Future Under eBay
eBay views the acquisition as a major catalyst for its long-term growth. By integrating Depop into its existing infrastructure, eBay aims to leverage its massive operational scale to bolster the pre-loved fashion category.
“Depop has built a trusted, social-forward marketplace with strong momentum,” stated eBay CEO Jamie Iannone in the official press release. “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.”
A Pattern of Divestment
The sale of Depop continues a recent trend for Etsy, which has moved to offload several niche marketplaces acquired in previous years. This follows a pattern of purchasing and subsequently divesting platforms such as the Brazilian e-commerce site Elo7 and the musical instrument marketplace Reverb.
The deal between Etsy and eBay is currently expected to close in the second quarter of this year.
For more details regarding the financial implications of this move, you can review the full announcement provided by Etsy.