The deal will land around £45m for Depop CEO Simon Beckerman
Etsy (NASDAQ:ETSY) has moved to make a $1.6bn bid for Depop in an effort to capitalise on the growing fashion resale market.
If it goes ahead then Depop’s early backers could be in for a big payout.
Depop, since its founding the years ago, has grown in popularity in the past 12 months, with as many as 27m people using its app and website to buy and sell second-hand clothes.
It is thought that 90% of Depop’s customer base is under the age of 26. This gives access to a sizeable pool of young shoppers.
Josh Silverman, chief executive of Etsy, explained the benefits of this point, telling investors that ‘Generation Z’ now account for 25% of the global workforce, while well over 1bn would be in jobs by 2030.
“That’s four times the US population and Depop is the choice of Gen Z,” Silverman added. “We think Depop is the most exciting company in the most exciting sector in retail right now.”
“Recommerce of clothing is growing at 40 per cent year-over-year and is projected to be a $64 billion market in the US alone.”
Etsy, after its founding in 2005, listed on the New York Stock Exchange, and has since been aiming to increase its pull among younger generations. The average age of its current users is 39, due to the app’s focus largely being on handmade pieces and secondhand garments.
The deal will land around £45m for Simon Beckerman, who founded Depop “for fun” in 2011, while working for an Italian fashion publication. Beckerman owns around 4% of the shares.
Maria Raga, Depop’s chief executive, who joined from Groupon and headed up the firm since 2016, has a stake roughly of the same size.
Depop has registered users in nearly 150 countries, as its active sellers sold $650m worth of items last year. Depop took $70m from the sales.
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