Etsy bought Depop for $1.6B in 2021 — wrote off $898M, sold to eBay at $425M loss

Depop was founded in 2011 in Italy by Simon Beckerman as a peer-to-peer fashion resale app. By 2021 it had 35 million users — overwhelmingly Gen Z — and was the 10th most-visited shopping platform for that demographic in the US. Gross merchandise volume hit $650 million in 2020, with revenue of $70 million. The app's feed-based interface made it feel more like Instagram than a marketplace, and it built a devoted following among young people who saw it as the sustainable, cool alternative to fast fashion.

In June 2021, Etsy acquired Depop for $1.625 billion in cash — its most expensive acquisition ever — paying roughly 23 times Depop's $70 million annual revenue. Etsy CEO Josh Silverman bet that Depop would bring a younger demographic to Etsy's ecosystem and capture the booming second-hand clothing market. Depop continued as a standalone brand in London, but the integration was difficult from the start: Depop's teenage user base had almost no overlap with Etsy's older, craft-and-home audience.

Just 18 months later, in October 2022, Etsy recorded a non-cash goodwill impairment charge of $897.9 million on Depop — effectively admitting it had overpaid by nearly $900 million. The app struggled to monetize its 35 million users: transaction fees were thin, and the freewheeling marketplace culture bred scams, security breaches, and fake listings that eroded trust. CEO Maria Raga stepped down by the end of 2022, replaced by Kruti Patel Goyal from Etsy. The Gen Z gold rush had turned into a balance sheet disaster.

In February 2026, Etsy announced it was selling Depop to eBay for $1.2 billion — a $425 million loss from the acquisition price, on top of the $898 million already written off. In total, Etsy's $1.625 billion bet on Gen Z's closet was worth less than half that within five years. Depop continues under eBay, but the acquisition became one of the most expensive mistakes in fashion e-commerce: a textbook case of paying pandemic-era multiples for cultural buzz that had no path to profitability.