eBay Buys Depop From Etsy for $1.2 Billion

eBay announced Wednesday that it will buy Depop, the popular secondhand clothing marketplace, from Etsy for roughly $1.2 billion in cash. The deal, which both companies' boards have already approved, is expected to close in the second quarter of 2026.

Etsy purchased Depop for $1.6 billion in 2021, making the sale a financial loss for the company. However, Etsy's leadership sees the deal as an opportunity to concentrate on what it does best: running its core marketplace for handmade and vintage goods.

Background

Depop has become one of the fastest-growing fashion resale platforms in the United States, particularly popular with younger shoppers. The marketplace generated roughly $1 billion in annual sales last year and attracted nearly 7 million active buyers, with almost 90 percent under age 34. The platform has more than 3 million active sellers.

Etsy's decision to sell Depop reflects broader challenges the company has faced in recent years. After experiencing strong growth during the pandemic e-commerce boom, Etsy's expansion has slowed significantly. The company reported just 2.2 percent year-over-year revenue growth in 2024, down from 7.1 percent the previous year. Competition from platforms like Temu, Shein, and Amazon has intensified pressure on Etsy's business.

The sale continues a pattern for Etsy of acquiring niche online marketplaces and then divesting them. The company sold its music instrument marketplace Reverb to investment firms last year. In both cases, Etsy has stated its intention to focus resources on its main marketplace.

Key Details

eBay will fund the $1.2 billion purchase using cash on hand. Etsy plans to use the proceeds for general business purposes, continued stock buybacks, and investment in its core marketplace.

Depop will maintain its separate identity after the acquisition. The platform will keep its name, brand, and distinct culture, according to the companies' announcement.

Why eBay Wants Depop

For eBay, the acquisition represents a strategic move to strengthen its presence in fashion resale and reach younger consumers. Fashion already generates more than $10 billion in annual sales for eBay and delivered 10 percent year-over-year growth in the United States during 2025.

"Depop has built a trusted, social-forward marketplace with strong momentum in the pre-loved fashion category, and 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," said Jamie Iannone, eBay's chief executive officer.

eBay plans to use its resources to help Depop grow. The company will offer Depop sellers access to its financial services, shipping solutions, and authenticity verification programs. eBay also intends to cross-list Depop inventory across its broader platform, potentially expanding the marketplace's reach globally.

Etsy's Strategic Shift

Etsy's chief executive, Kruti Patel Goyal, framed the sale as a positive step for the company's long-term direction.

"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," Goyal said in a statement.

The company has been under pressure to demonstrate growth to investors. By selling Depop and refocusing on its core business, Etsy is signaling that it believes it can better compete by concentrating its resources and attention.

What This Means

The acquisition reshapes the competitive landscape in online secondhand fashion. eBay now controls one of the most popular resale platforms among younger demographics, potentially strengthening its position against other players in the growing market for pre-owned clothing.

For Depop users and sellers, the acquisition could bring both benefits and uncertainty. Access to eBay's infrastructure and global reach may help sellers find more buyers. However, some sellers and buyers worry that integrating Depop into eBay's larger platform could dilute what makes Depop distinctive: its social-forward approach and tight-knit community focused on younger, fashion-conscious users.

The deal also reflects the challenges facing specialized online marketplaces. Even successful platforms like Depop can struggle when owned by larger companies facing their own growth pressures. Etsy's decision to sell suggests that owning multiple marketplaces stretched the company's focus and resources too thin.

For the broader e-commerce industry, the transaction shows the consolidation trend. Larger platforms are buying up successful niche marketplaces to expand their reach and product offerings. This pattern has played out repeatedly as companies like eBay, Amazon, and others acquire smaller competitors to strengthen their market positions.

Both companies will report their fourth-quarter earnings this week, giving executives an opportunity to discuss the deal's strategic rationale with investors and analysts.