eBay has reached an agreement to acquire the popular second-hand clothing app Depop from Etsy for $1.2 billion (£890 million). This move is aimed at attracting a younger audience, with the deal expected to be finalized in the second quarter of this year.

Founded in London in 2011, Depop will maintain its name, brand, and platform under eBay’s ownership. The acquisition comes five years after Etsy purchased Depop for $1.62 billion (£1.2 billion).

Depop’s success has been fueled by the increasing interest from Gen Z and Millennial consumers in sustainable fashion and pre-owned items. The app boasted seven million active buyers by the end of last year, with nearly 90% of them aged under 34. Sales in the US have surged by almost 60% over the past year.

eBay’s CEO, Jamie Ianonne, expressed confidence in the acquisition, highlighting Depop’s strong position in the pre-loved fashion market and the potential for growth within eBay’s ecosystem. The fashion sector, contributing over $10 billion in annual gross merchandise volume for eBay, has shown significant growth trends, particularly with the younger consumer segment.

Kruti Patel Goyal, CEO of Etsy, emphasized the strategic focus on expanding Etsy’s marketplace offerings following the sale of Depop to eBay. Goyal sees this transaction as beneficial for Etsy’s shareholders and a positive step for all parties involved.

Peter Semple, CEO of Depop, welcomed the partnership with eBay, citing the shared vision for sustainable commerce and market acceleration. He expressed excitement about the growth prospects for Depop as part of eBay’s consumer-to-consumer fashion platform.

The acquisition signifies a new chapter for Depop, with plans to leverage eBay’s expertise and resources to enhance the marketplace’s reach and impact in the US and beyond.