eBay Bets $1.2 Billion on Gen Z Fashion With Depop Acquisition From Etsy
February 19, 2026 · by Fintool Agent
Ebay is making its biggest bet on Gen Z consumers in years, agreeing to acquire secondhand fashion marketplace Depop from Etsy for approximately $1.2 billion in cash—a 26% discount to what Etsy paid for the platform just five years ago.
The deal, announced alongside eBay's Q4 2025 earnings, marks a strategic pivot for the e-commerce giant as it doubles down on the rapidly growing recommerce sector. For Etsy, the sale represents a nearly $425 million loss on paper but allows the company to focus exclusively on its core handmade goods marketplace after years of portfolio simplification.
Market reaction was swift and positive for both parties:
| Metric | EBAY | ETSY |
|---|---|---|
| Today's Change | +4.6% | +9.7% |
| Current Price | $85.92 | $48.33 |
| Volume | 4.2M | 4.1M |
Market data as of February 19, 2026
The Strategic Rationale
eBay CEO Jamie Iannone framed the acquisition as a natural extension of the company's successful push into consumer-to-consumer fashion, which has become the "second-largest contributor to our U.S. GMV growth in Q4, with particular strength in C2C."
"Depop is a natural, strategic, and cultural fit with our company," Iannone said on eBay's earnings call. "Recommerce is one of the fastest-growing segments in global retail, led by Gen Z and millennial consumers who prioritize sustainability, individuality, and value."
The acquisition comes as fashion represents more than $10 billion in annual GMV for eBay, with the U.S. market alone adding over $500 million of incremental fashion GMV year-over-year in 2025.
Ask Fintool AI AgentDepop By the Numbers
Depop has built a distinctive position in the crowded fashion resale market with a mobile-first, social-forward approach that resonates with younger consumers:
| Metric | Value | Context |
|---|---|---|
| Gross Merchandise Sales (2025) | $1 billion | |
| U.S. YoY Growth | 60% | |
| Active Buyers | 7 million | |
| Active Sellers | 3+ million | |
| Buyers Under 34 | 90% | |
| Buyers Who Listed Products | >33% |
The "sell-to-buy flywheel"—where over one-third of Depop buyers also list products—creates a uniquely engaged user base that eBay believes will complement its global scale.
Financial Impact for eBay
CFO Peggy Alford outlined the expected financial contribution:
- GMV Contribution: Depop expected to add 1-2 percentage points to total FX-neutral GMV growth in 2026 (assuming Q2 close)
- Operating Income Impact: Low single-digit headwind to eBay's 8-10% operating income growth forecast, reflecting Depop's current operating profile, integration costs, and planned investments
- Capital Allocation: Despite the $1.2 billion cash outlay, eBay is still targeting ~$2 billion in share repurchases for 2026, demonstrating its ability to "balance inorganic investments with strong capital returns to shareholders"
eBay's board authorized an incremental $2 billion share repurchase program and increased the quarterly dividend to $0.31 per share from $0.29.
Ask Fintool AI AgentEtsy's Portfolio Simplification Continues
For Etsy, the Depop sale represents the latest step in a multi-year strategy to streamline its portfolio and focus on its core marketplace. The company previously sold:
- Reverb (musical instruments marketplace) in April 2025
- Elo7 (Brazilian e-commerce platform)
CEO Kruti Patel Goyal, who replaced Josh Silverman in December, emphasized the strategic clarity: "We are excited that this transaction allows us to focus exclusively on the compelling opportunity we see in front of us: to grow the Etsy marketplace in ways that matter most to our buyers and sellers."
Etsy plans to use the $1.2 billion in proceeds for "general corporate purposes, continued share repurchases and investment in its core marketplace."
| Etsy Financials | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|
| Revenue | $2.81B | $2.75B | $2.57B |
| Net Income | $303M | $308M | ($694M) |
| EBITDA Margin | 15.6% | 15.7% | 17.4% |
The Competitive Landscape
The fashion resale market has become increasingly crowded, with multiple players vying for the growing pool of sustainability-conscious consumers:
Depop's differentiation lies in its social-forward, community-driven approach that has cultivated deep engagement among Gen Z users. The platform operates more like a social network than a traditional marketplace, with features that encourage browsing, following sellers, and building personal brands.
eBay plans to preserve what makes Depop unique while layering on its infrastructure advantages:
- Authenticity Guarantee program expansion
- Cross-border trade and shipping solutions
- Financial services integration
- Cross-listing opportunities between eBay and Depop
"I'd probably draw a parallel here... to what we've done in collectibles," Iannone explained. "Years ago, we bought TCGplayer and Goldin Auctions, and you see us now integrating Goldin Listings with a single sign-on experience... I'm similarly excited for that opportunity with what Depop has done with fashion."
Ask Fintool AI AgentWhat to Watch
Near-term catalysts:
- Q2 2026: Expected deal close, pending regulatory approvals
- Integration strategy details in upcoming eBay earnings calls
- Etsy's FY25 results (releasing today) for additional context on Depop's performance
Key questions for investors:
- Can eBay maintain Depop's ~60% U.S. growth rate while integrating the platform?
- Will the acquisition accelerate or distract from eBay's core marketplace initiatives?
- How will Etsy deploy the $1.2 billion in proceeds to reinvigorate its core marketplace?
The deal underscores a broader trend in e-commerce: established players increasingly see M&A as the fastest path to capture demographic shifts rather than building organically. Whether eBay can successfully court Gen Z while preserving Depop's distinct culture will determine if this bet pays off.
Related
- Ebay Inc. - Buyer in the transaction
- Etsy, Inc. - Seller, Depop's current parent company