eBay has acquired Depop from Etsy in an all cash $1.2 billion deal, signaling a major reshuffle in the global fashion resale landscape. The move comes less than five years after Etsy’s $1.625 billion purchase of the Gen Z focused marketplace, and it comes amid a cooling tech market and intensifying competition in recommerce, as valuations and strategic priorities have shifted. As Depop transitions from Etsy’s portfolio into eBay’s ecosystem, the deal raises fresh questions about platform synergies, long term growth potential in youth driven resale, and how legacy marketplaces are repositioning themselves to stay relevant with the next generation of fashion consumers.
1. The eBay Acquisition of Depop Transaction
The transition of Depop from Etsy to eBay represents a notable “buy high, sell low” scenario in the e commerce sector.
| Feature | Etsy Acquisition (June 2021) | eBay Acquisition (Feb 2026) |
| Purchase Price | $1.625 Billion | $1.2 Billion |
| Market Context | Pandemic e commerce boom; low interest rates | Post pandemic correction; high interest rates |
| Strategic Goal | Build a “House of Brands” for unique items | Capture Gen Z demographic and expand re commerce |
| Depop Performance | Rapid growth, high cash burn | $1B GMV (2025), narrowing losses |
Why Etsy Paid a Premium (2021) and Sold to Ebay for Less (2026)
In 2021, Etsy was riding a wave of unprecedented growth fueled by the COVID 19 pandemic. With consumers confined to their homes, online marketplaces saw record breaking traffic and sales. Etsy’s acquisition of Depop was a strategic move to dominate the “Gen Z” fashion space. At the time, valuations for high growth tech companies were at an all time high due to low interest rates and a surplus of venture capital. Etsy viewed Depop as the “Etsy for the next generation,” a platform that would allow them to tap into the burgeoning resale market without diluting their core brand of handmade and vintage goods.
In 2026, the retail sector had shifted dramatically. Several factors contributed to the $425 million drop in valuation:
- Macroeconomic Pressures: Rising interest rates and inflation led to a cooling of the e commerce sector. Investors shifted their focus from “growth at all costs” to profitability and core business stability.
- Strategic Refocusing: Etsy faced increasing competition from low cost Chinese giants like Temu and Shein, which pressured its core marketplace. To protect its margins, Etsy began divesting non core assets, including Elo7 and Reverb, to focus exclusively on its primary platform.
- Competitive Landscape: The rise of Vinted significantly impacted Depop’s market share. Vinted’s “no seller fee” model and frictionless user experience made it a more attractive option for casual sellers, while Depop remained a more curated, social media style platform that required more effort from users.
2. Market Dynamics: Gen Z and Millennial Demand
Depop’s primary asset remains its deep penetration into the younger demographic. As of late 2025, nearly 90% of Depop’s 7 million active buyers are under the age of 34.
The Sustainability vs. Price Paradox
Gen Z and Millennials are the primary drivers of the “re commerce” movement, motivated by two main factors:
- Sustainability: Younger consumers are increasingly conscious of the environmental impact of fast fashion. Resale provides a way to consume fashion more ethically.
- Uniqueness and Self Expression: Depop’s social media like interface allows users to build personal brands and find “one of a kind” vintage pieces that are not available in traditional retail.
However, a “price paradox” has emerged. While these consumers value sustainability, they are also highly price sensitive. The rise of TikTok Shop and ultra fast fashion (Shein) has created a competitive environment where resale platforms must compete not just on ethics, but on convenience and cost.
Depop’s Performance Valuation Metrics before Acquisition (2024–2025)
Despite the valuation drop, Depop’s underlying business has shown resilience:
- Revenue Growth: In 2024, revenue surged by 42% to £101.6 million.
- GMV: Gross Merchandise Volume reached approximately $1 billion in 2025, with the U.S. market seeing a 60% year over year growth.
- Profitability: While still loss making, Depop’s operating losses narrowed from £49.1 million in 2023 to £42 million in 2024, indicating a path toward sustainability.
Future Outlook
The sale of Depop to eBay at a lower valuation than its 2021 purchase price is less a reflection of Depop’s failure and more a symptom of a broader market correction. Etsy’s “House of Brands” strategy proved difficult to maintain in a high interest rate environment where core business focus became paramount. For Depop, joining eBay provides the scale and operational infrastructure needed to compete with the likes of Vinted and TikTok Shop, while for eBay, it represents a vital infusion of youth and social commerce expertise. The resale market continues to grow, but the era of inflated valuations has given way to a more disciplined, profitability focused landscape.
