Generation Z-focused resale fashion app business Depop is to snapped up by Etsy in a deal worth more than $1.6bn.
The NASDAQ-listed company is to pay £1.625bn for the London-headquartered firm which also has bases in Manchester, New York, Los Angeles and Sydney and has about 400 employees.
The deal is expected to close during the third quarter of 2021 and will operate as a standalone marketplace run by its existing leadership team, BusinessLive reports.
Founded in 2011, Depop's 2020 gross merchandise sales (GMS) and revenue were approximately $650m and $70m, respectively, each increasing over 100% year-over-year.
Depop's GMS grew at a compounded annual growth rate of nearly 80% from 2017-2020.
Approximately 90% of Depop's active users are under the age of 26 while the app is the 10th most visited shopping site among Gen Z consumers in the US.
Etsy chief executive Josh Silverman said: "We are simply thrilled to be adding Depop—what we believe to be the resale home for Gen Z consumers—to the Etsy family.
"Depop is a vibrant, two-sided marketplace with a passionate community, a highly-differentiated offering of unique items, and we believe significant potential to further scale.
"Depop's world-class management team and employees have done a fantastic job nurturing this community and driving organic, authentic growth in a way that aligns well with Etsy's DNA and mission of Keeping Commerce Human.
"We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous 'house of brands' portfolio of individually distinct, and very special, ecommerce brands."
Starting first in the UK and moving into the US and Australia, Depop now has a community of approximately 30 million registered users across nearly 150 countries.
Depop's chief executive Maria Raga added: "We're on an incredible journey building Depop into a place where the next generation comes to explore unique fashion and be part of a community that's changing the way we shop.
"Our community is made up of people who are creating a new fashion system by establishing new trends and making new from old. They come to Depop for the clothes, but stay for the culture.
"We'll now take an exciting leap forward as part of the Etsy family, benefiting from Josh's and his team's expertise, and the resources of a much larger company whose values are so aligned with ours here at Depop."
Rachel Glaser, Etsy's chief financial officer, said: "We've admired Depop for a while, and are excited to have now reached an agreement to purchase this fantastic business - a company we believe is still in the early innings of its growth opportunity.
"We love Depop's rapidly growing GMS and loyal and engaged customer base, excellent user engagement and unit economics, opportunities to expand value added seller services, clear path for geographic expansion, and highly scalable, 'capital light' operating model.
"We're excited to build a 'house of brands' where the whole is greater than the sum of its parts."
Goldman Sachs served as exclusive financial advisor to Etsy, Deloitte as due diligence advisors and Fenwick & West LLP and Allen & Overy LLP served as Etsy's legal advisors.
Credit Suisse served as exclusive financial advisor to Depop and Weil, Gotshal & Manges LLP served as its legal advisor.