eBay to buy buzzer platform from Etsy for $1.2 billion. Shares of both companies soared

Online hand-made and vintage goods retailer Etsy said it is selling the online used clothing platform popular with millennials and Generation Z to retailer eBay. That sent shares of both companies skyrocketing.

Etsy announced the sale of online fashion platform Depop for about $1.2 billion. The company, whose marketplace allows small businesses to sell items ranging from handmade goods to home goods, acquired Depop in 2021 for a higher sum of $1.6 billion, MarketWatchnotes.

The platform will be bought by eBay and Etsy expects to keep the platform's former name. The deal is expected to close in the second quarter.

Etsy shares jumped more than 10% at the opening of trading on February 19. At the same time since the beginning of the year they are in the minus by 20.5%. Quotes eBay added about 3% - they were also supported by the results of the retailer for the fourth quarter and the forecast for the current quarter, which exceeded market expectations, notes the publication.

eBay is looking to strengthen its market position by developing its "recommerce" business and strengthening its role in the circular economy, which involves longer-term use of clothing and other personal items, Reuters notes. The company's bet on used and refurbished goods should spur sales growth in a challenging market environment, the agency said.

Etsy estimates that the purchase will help eBay attract a younger audience: last year, Depop had 7 million active buyers, with nearly 90% of them under the age of 34.

"The younger generation is actively targeting clothing with a story, promoting sustainable consumption and reuse of items from their own closet. The acquisition of Depop gives us the opportunity to offer a more focused user experience in this segment," eBay CEO Jamie Iannone told Reuters.

eBay said Depop has "strong momentum in the pre-loved fashion segment" and will strengthen the retailer's position in one of the fastest-growing areas of the resale market, estimating that the deal will add 1-2 percentage points to total merchandise volume (GMV) growth in 2026.

The sale of Depop will "enable us to grow the Etsy Marketplace in the areas most important to our buyers and sellers," the company said. It continues to adapt after a boom in online demand during the pandemic, MarketWatch noted, with additional pressure on the business from duties and consumer caution in the face of higher prices.

Etsy has been getting rid of other online assets recently. Last year, it sold musical instrument marketplace Reverb, and in 2023 it sold Brazilian e-commerce platform Elo7.

This article was AI-translated and verified by a human editor