On February 18, 2026, the online retail world was shaken by a major announcement: Etsy, the digital marketplace known for its handcrafted and niche goods, revealed it would sell Depop—a vibrant secondhand clothing app beloved by Gen Z—to eBay for $1.2 billion in cash. The move marks a significant pivot for both companies and highlights the ever-shifting landscape of e-commerce, especially as it relates to the booming resale and recommerce sectors.
Depop, founded in the UK and acquired by Etsy just five years ago for $1.6 billion, has exploded in popularity among young shoppers seeking sustainable, affordable alternatives to fast fashion. As of December 31, 2025, Depop boasted seven million active buyers—nearly 90% of whom are under the age of 34—and more than three million active sellers. The platform reported approximately $1 billion in gross merchandise sales in 2025, with a staggering 60% year-over-year growth in the U.S. alone, according to a joint press release from eBay and Etsy. Clearly, Depop has become a force to be reckoned with in the world of pre-loved fashion.
For Etsy, the decision to part ways with Depop comes as the company seeks to refocus on its core marketplace amid slowing growth and fierce competition from e-commerce giants like Amazon, Shopify, and rapidly growing discount retailers such as Temu and Shein. Kruti Patel Goyal, Etsy’s chief executive officer, explained the rationale behind the sale, stating, “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.” She added, “We believe this transaction is a great outcome for Etsy's shareholders, and a positive next step for all involved. We are proud of what the Depop team has built—a truly differentiated brand and product, grounded in clear purpose and strong community—becoming one of the fastest-growing fashion resale marketplaces in the U.S. I am confident that Depop is well-positioned for its next phase of growth as part of eBay.”
Etsy’s acquisition of Depop in 2021 was part of a broader “house of brands” strategy, which also saw the company purchase Reverb, a music gear site, and Elo7, a Brazilian e-commerce platform. However, as the pandemic e-commerce boom cooled, Etsy found itself grappling with decelerating growth. Its year-over-year revenue grew just 2.2% in 2024, down from 7.1% in 2023, and the platform saw declines in both active buyers and gross merchandise volume throughout 2024. In response, Etsy has been unwinding many of these acquisitions—selling Elo7 in 2023 and planning to divest Reverb—to double down on its core business. The proceeds from the Depop sale are expected to be used for share repurchases and other corporate purposes, potentially providing a much-needed boost to Etsy’s shareholders, who have seen the stock fall about 20% in the past year.
Meanwhile, eBay is betting big on the future of recommerce and the purchasing power of younger generations. The acquisition of Depop is expected to accelerate eBay’s consumer-to-consumer (C2C) strategy by deepening its reach with Gen Z and millennial shoppers—demographics where eBay has historically been underrepresented. Jamie Iannone, eBay’s chief executive officer, underscored the significance of the deal: “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.”
Fashion is already a major driver for eBay, representing more than $10 billion in annual gross merchandise volume and delivering 10% year-over-year GMV growth in the U.S. in 2025. Iannone continued, “This acquisition presents an opportunity to advance one of our newest and fastest-growing Focus Categories with a marketplace that complements our existing presence, and enables us to reach a younger demographic across the expanding recommerce landscape. We're excited to welcome the Depop team to eBay, and look forward to building on what makes them unique—their brand, culture and community—to deliver compelling benefits to buyers and sellers.”
Depop’s CEO, Peter Semple, echoed this optimism, saying, “We're thrilled to begin this next chapter with eBay, whose experience in the C2C fashion space and shared belief in people, opportunity, and a more sustainable future positions us to meaningfully accelerate our marketplace in the U.S. and beyond. This transaction is a testament to the significant growth we have delivered as we have evolved our product experience and strengthened our brand's place in the world.”
The deal, which has been unanimously approved by both companies’ boards of directors, is expected to close in the second quarter of 2026, pending regulatory approvals. Importantly, Depop will retain its name, brand, platform, and distinctive culture after the acquisition, ensuring continuity for its passionate community of buyers and sellers. eBay plans to leverage its global scale, financial services, shipping solutions, and authenticity guarantees to further accelerate Depop’s growth, while also expanding the visibility of Depop’s inventory through cross-listing opportunities—potentially unlocking additional market demand worldwide.
The financial markets responded with enthusiasm to the news. Etsy’s share price surged more than 15% in after-hours trading, while eBay’s stock jumped by almost 8%. eBay also announced its fourth-quarter and full-year 2025 financial results alongside the acquisition, reporting adjusted earnings per share of $1.41 on revenue of $2.97 billion—both figures exceeding analyst expectations. Sales increased 15% year-over-year, and gross merchandise volume grew 10% to $21.2 billion. Looking ahead, eBay expects adjusted earnings per share between $1.53 and $1.59 and revenue between $3 billion and $3.05 billion for the first quarter of 2026.
The broader context for this deal is the meteoric rise of the secondhand apparel market. According to a report by McKinsey, the sector is expected to grow two to three times faster than the market for new products through 2027. Apps like Depop have become especially popular with young people who are both environmentally conscious and budget-savvy—trends that accelerated during the pandemic as shoppers sought to save or earn extra money by trading used clothing. eBay’s move to acquire Depop signals its intent to remain at the forefront of this rapidly evolving space, even as other legacy players scramble to keep up.
Investor calls are scheduled for both companies to discuss the details of the transaction and their respective financial results, offering stakeholders a chance to hear directly from leadership about the future of these iconic marketplaces.
As the dust settles, one thing is clear: the world of online fashion and resale is in the midst of a generational shift, and the battle for the hearts—and wallets—of Gen Z and millennial shoppers is only heating up. With Depop’s energetic community joining eBay’s vast platform, the next chapter in digital recommerce promises to be anything but dull.