Etsy Sells Depop to eBay for $1.2 Billion: A Strategic Shift in the E-Commerce Landscape
In a significant move within the e-commerce sector, Etsy has announced the sale of its subsidiary, Depop, a popular secondhand clothing marketplace, to eBay for $1.2 billion in cash. This transaction, disclosed on February 18, 2026, marks a pivotal moment for all three companies involved.
Depop’s Journey and Performance
Founded in 2011, Depop has carved out a niche among Gen Z and millennial consumers, offering a platform for buying and selling pre-owned fashion items. By the end of 2025, Depop reported approximately $1 billion in gross merchandise sales (GMS), reflecting a nearly 60% year-over-year growth in the U.S. market. The platform boasted seven million active buyers, with nearly 90% under the age of 34, and over three million active sellers.
Etsy’s Acquisition and Subsequent Sale
Etsy initially acquired Depop in June 2021 for $1.625 billion, aiming to expand its reach into the burgeoning secondhand fashion market and attract a younger demographic. However, nearly five years later, Etsy has decided to divest Depop to refocus on its core marketplace. Kruti Patel Goyal, Etsy’s CEO, stated, We are excited that this transaction allows us to focus exclusively on the compelling opportunity we see in front of us: to grow the Etsy marketplace in ways that matter most to our buyers and sellers.
eBay’s Strategic Acquisition
For eBay, acquiring Depop aligns with its strategy to strengthen its position in the pre-owned fashion sector. Jamie Iannone, eBay’s CEO, expressed confidence in the acquisition, noting that Depop’s trusted, social-forward marketplace would benefit from eBay’s scale and operational capabilities. This move is expected to enhance eBay’s appeal to younger consumers and diversify its offerings in the competitive e-commerce landscape.
Etsy’s Financial Performance and Market Challenges
Etsy’s decision to sell Depop comes amid challenges in sustaining growth post-pandemic. The company reported a 2.2% year-over-year revenue increase in 2024, a decline from the 7.1% growth in 2023. With increasing competition from platforms like Temu, Shein, and Amazon, Etsy is seeking to streamline its operations and concentrate on its primary marketplace to better serve its community of buyers and sellers.
Broader Implications in the E-Commerce Industry
This transaction underscores a broader trend of consolidation and strategic realignment within the e-commerce industry. Companies are continually assessing their portfolios to focus on core competencies and respond to evolving consumer behaviors. The sale of Depop by Etsy to eBay highlights the dynamic nature of the market and the importance of adaptability in maintaining a competitive edge.
Conclusion
The sale of Depop from Etsy to eBay for $1.2 billion signifies a strategic shift for both companies. Etsy aims to concentrate on enhancing its primary marketplace, while eBay seeks to bolster its presence in the secondhand fashion market. This move reflects the ongoing evolution of the e-commerce landscape, where companies must continually adapt to changing consumer preferences and market dynamics.
