eBay Buys Depop for $1.2 Billion to Reach Younger Shoppers

eBay is buying Depop for $1.2 billion, which is a very big amount of money. This is to help eBay reach younger people who like buying used clothes.
By Newsroom | Business, Technology |

eBay is set to buy Depop, a popular app for buying and selling used clothes, from Etsy for $1.2 billion in cash. This move is seen as eBay's attempt to connect with younger shoppers, specifically Gen Z. Depop is expected to keep its own name, brand, and how it operates. Etsy plans to use the money from the sale for its business and to buy back its own stock.

Background of the Deal

The agreement between eBay and Etsy to sell Depop was announced recently. eBay, a well-established online marketplace, aims to increase its appeal to a younger audience by acquiring Depop, which is known for its fashion resale and has a strong following among Gen Z and Millennial users.

Etsy sells second-hand fashion app Depop to eBay for $1.2bn - 1

  • Date of Announcement: Reports indicate the deal was announced around February 18, 2026.

  • Transaction Value: The sale price is $1.2 billion in cash.

  • Seller: Etsy, known for handcrafted and unique items.

  • Buyer: eBay, a large online auction and retail platform.

  • Acquired Company: Depop, a mobile app focused on second-hand fashion.

Etsy stated that selling Depop will allow the company to focus on its main marketplace and its growth. This is not the first time Etsy has sold off a smaller online market it had previously acquired; it has also sold off businesses like Elo7 (a Brazilian e-commerce company) and Reverb (a marketplace for musical instruments).

Read More: Etsy sells Depop to eBay for $1.2 billion, shares jump 14%

Depop's Role and Market Position

Depop has become a notable platform in the fashion resale market, particularly among younger consumers looking for sustainable and affordable clothing alternatives. It was founded in the UK in 2011.

Etsy sells second-hand fashion app Depop to eBay for $1.2bn - 2

  • Depop's Focus: Community-powered, circular fashion marketplace for buying, selling, and discovering desirable, affordable second-hand fashion.

  • User Base: Strong engagement with Gen Z and Millennial customers.

  • Market Context: The purchase comes at a time when the popularity of used clothing has grown significantly. Consumers are increasingly seeking sustainable and budget-friendly options.

While Depop has seen success, its former parent company, Etsy, has faced challenges. Etsy, which typically focuses on handcrafted and vintage items, experienced a boost during the Covid-19 pandemic as online shopping increased. However, it has since faced shrinking demand and tough competition in the crafts market, including from fast-growing, low-cost online retailers like Temu and Shein. Depop's value has also faced pressure with the rise of other fashion resale apps, such as Vinted.

eBay's Strategic Aims

For eBay, the acquisition of Depop is a clear strategy to capture a younger demographic and enhance its presence in the fashion sector.

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  • CEO's Statement: Jamie Iannone, CEO of eBay, highlighted that the deal offers a prime opportunity to attract a younger demographic and grow the company's presence in fashion.

  • Complementary Offering: Depop's addition is expected to enhance eBay's consumer-to-consumer (C2C) value proposition with a platform that has a "compelling complementary offering."

Financial Impact and Future Outlook

The sale has had an immediate financial impact, particularly on Etsy's stock.

  • Etsy Stock Performance: Etsy's shares rose more than 14% in extended trading following the announcement of the sale.

  • Etsy's Use of Proceeds: Etsy plans to use the funds for general corporate purposes, continued share repurchases, and investment in its core marketplace.

The transaction is anticipated to be completed in the second quarter of 2026. Depop is expected to operate independently, retaining its name, brand, platform, and company culture.

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Expert and Company Perspectives

Both companies have shared statements about the acquisition, framing it as a positive step for their respective futures.

"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.”— Statement from Etsy regarding the Depop sale.

"The acquisition of Depop offers eBay a prime opportunity to attract a younger demographic and expand our presence in the fashion category."— Jamie Iannone, CEO of eBay.

Conclusion

The sale of Depop by Etsy to eBay for $1.2 billion represents a significant move in the online retail landscape. eBay is strategically positioning itself to engage with Gen Z consumers by integrating Depop's established user base and brand into its platform. For Etsy, the divestment allows for a renewed focus on its core marketplace, potentially addressing recent challenges related to competition and market demand. The deal's success will likely hinge on eBay's ability to leverage Depop's brand appeal and community while maintaining its distinct identity.

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Frequently Asked Questions

Q: Why is eBay buying Depop from Etsy?
eBay is buying Depop for $1.2 billion to connect with younger shoppers, especially Gen Z, who use the Depop app a lot for buying and selling used clothes.
Q: How much did eBay pay for Depop?
eBay paid $1.2 billion in cash to buy Depop from Etsy.
Q: What will happen to Depop after eBay buys it?
Depop will likely keep its own name, brand, and how it works. It will still be a place to buy and sell fashion.
Q: Why did Etsy sell Depop?
Etsy sold Depop to focus more on its main business and to use the money for its company and to buy back its own stock.
Q: When will the deal be finished?
The deal is expected to be finished in the second part of 2026.
Q: How does this affect shoppers?
Shoppers on Depop can expect the app to keep running as usual. eBay hopes to attract more young shoppers with Depop's popular platform.