Etsy is buying the fashion resale app Depop for $1.6 billion.

Depop, the fashion resale market beloved by Generation Z, might be acquired by Etsy for $1.6 billion, the two firms introduced on Wednesday.

The money deal, which is anticipated to shut by the third quarter of this 12 months, underscores the rising affect of clothes resale platforms. More consumers are turning to the secondhand market for one thing cheaper and — probably — greener as the overproduction of clothes more and more provides to landfills.

The pattern seems to have been accelerated by the pandemic as extra consumers seemed to declutter wardrobes, earn money by promoting their outdated garments or arrange fashion customization companies from their bedrooms.

Investor urge for food is additionally on the rise. Last month, Europe’s largest secondhand fashion market, Vinted, raised 250 million euros in a funding spherical that valued the start-up at €three.5 billion ($four.26 billion), whereas in the United States firms akin to ThredUp and Poshmark have gone public this 12 months.

Depop, which was based in 2011, has been significantly profitable in constructing a market for youthful shoppers, who’re adopting secondhand fashion sooner than some other group. Ninety p.c of its customers are beneath 26, with 30 million customers throughout 150 international locations. The platform is significantly recognized for its classic garments and streetwear — and for creating a brand new cohort of on-line influencers well-known for promoting their wares.

“We are simply thrilled to be adding Depop — what we believe to be the resale home for Gen Z consumers — to the Etsy family,” stated the Etsy chief govt, Josh Silverman.

He stated he believed the platform had “significant potential to further scale” and stated that he noticed “significant opportunities for shared expertise and growth synergies” for Etsy’s attire sector, which was valued at $1 billion final 12 months.

According to the Boston Consulting Group, the international market for pre-owned attire is value as much as $40 billion a 12 months — about 2 p.c of the complete attire market. It is anticipated to develop 15 to 20 p.c yearly for the subsequent 5 years.

The transaction is anticipated to shut in the third quarter of 2021, topic to antitrust opinions in Britain and the United States.