In 2021, Etsy acquired Depop, a UK-based secondhand shopping platform, for $1.6 billion — a striking 23x Depop's 2020 revenue of $70 million.

Given Etsy's market cap of $20 billion at the time, they could have easily added a secondhand fashion category to their platform. Instead, they chose to acquire Depop outright. So, what made Depop so valuable?

Why Did Etsy Acquire Depop?

Etsy’s official press release offers some clues. They highlighted Depop’s unique, youthful user base:

90% of Depop's active users were under the age of 26.
Depop was the 10th most visited shopping site among Gen Z in the U.S.
Young consumers were rapidly adopting secondhand fashion trends faster than any other audience.

Depop's Audience Wasn't the Only Reason

While Depop’s younger demographic was important, Etsy’s decision went deeper than just targeting a Gen Z audience. If attracting younger shoppers was the primary goal, Etsy could have pursued other platforms like Poshmark that also catered to the same demographic. Instead, Etsy chose Depop because of its distinct selling approach — one that fostered a social commerce experience.

We can see this Gen Z focus reflected in Depop's branding and marketing pages — from vibrant visuals to influencer-driven campaigns that align closely with younger audiences' aesthetic preferences and social media habits.

Depop's Unique Selling Strategy

Depop differentiated itself with a distinct seller strategy:

Encouraging Sellers to Promote Themselves: Depop actively urged sellers to market their profiles, particularly on Instagram, calling it “one of the best ways to build your brand and your customer base.”
Encouraging Social Exploration: Depop encouraged both buyers and sellers to engage on platforms like TikTok and YouTube, where secondhand fashion content thrives in teen and 20-something communities.

The Social Commerce Edge

Depop’s focus on community-driven selling, social media promotion, and influencer culture makes it feel less like traditional e-commerce and more like a social platform. This unique dynamic likely made it more valuable to Etsy than other competitors.

Key Takeaway for Founders and Product Managers

Sometimes acquisitions are not just about what a company sells or who they sell to — but how they sell. In Depop’s case, their strong emphasis on social selling and community-driven commerce gave Etsy a valuable new playbook for engaging younger consumers.