Gen Z Shopping Spree: Etsy Acquires Depop​


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By Adelina Budulan​


The Story

Etsy is acquiring Depop for $1.6 billion (Financial Times).

In the words of Josh Silverman, CEO of Etsy, Depop is “the resale home for Gen Z consumers” (Etsy). The London-based company operates an online marketplace for second-hand clothing, and boasts some 30 million active users - of which more than 90% are under the age of 26 (The Fashion Law).

Etsy operates a marketplace for handmade and vintage goods, which largely appeals to millennials or older consumers (Financial Times). Therefore, the acquisition of Depop will likely enable Etsy to grow its younger consumer base. It also represents the second instalment in Etsy’s quest for expansion, following its 2019 acquisition of Reverb – a marketplace for new and used musical instruments (Vox).

What It Means For Businesses and Law Firms

The global resale market is reportedly worth between $30 and $40 billion (Boston Consulting Group). In the wake of the ongoing pandemic, consumers are becoming increasingly concerned with forming sustainable habits; this shift has prompted a flurry of investments in the resale space (Boston Consulting Group).

For instance, Kering, the owner of Gucci and Balenciaga, partnered with Tiger Global Management to invest a whopping £216 million in Paris-based resale platform Vestiaire Collective (Financial Times). The public markets have also been generous, with platforms such as Poshmark and ThredUp pursuing successful initial public offerings (Forbes). The acquisition of Depop will allow Etsy to get in on the action, and capitalise on the opportunity presented by the growing resale space.

Allen & Overy and Fenwick & West are acting for Etsy, while Weil, Gotshal & Manges is acting for Depop (Etsy). Teams within the firms’ respective corporate practices coordinated the deal, with their tasks likely including: conducting due diligence, advising on the structure and financing of the transaction, and drafting and negotiating the Share Purchase Agreement (SPA). They likely liaised with teams across different practice areas - such as dispute resolution, finance, tax, employment, and intellectual property.

The deal is expected to close during the third quarter of 2021, subject to regulatory approval in the US and the UK (Etsy). Following Nvidia’s proposed takeover of Arm, the debate about UK tech companies being scooped up by larger US rivals has recently regained momentum (Financial Times). As a result, the Competition and Markets Authority has bolstered its scrutiny of such transactions.

Since the Etsy-Depop deal revolves around e-commerce, it may well be investigated “with a fine-toothed comb before getting the green light” (CNET). Indeed, the law firms involved may need to flex their antitrust muscles to convince the regulator to allow the deal to proceed. In a seemingly pre-emptive move, Etsy has already stated that Depop will remain headquartered in London, and operate as a standalone business run by its current team (Etsy).

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