eBay Pays $1.2B for Depop, Unwinding Etsy's Gen Z Gamble
February 18, 2026 · by Fintool Agent
Ebay is acquiring Depop, the Gen Z-focused fashion resale marketplace, from Etsy for approximately $1.2 billion in cash—roughly $420 million less than Etsy paid for the UK-founded platform in 2021.
The deal marks the final chapter in Etsy's failed "house of brands" strategy and hands eBay a direct line to younger consumers who have largely bypassed its core marketplace.
Stock reaction:
- Etsy surged 17% on the news, with investors cheering the strategic focus
- Ebay rose 7% alongside strong Q4 results
The Terms
eBay will pay a base purchase price of $1.2 billion in cash for all outstanding equity of Depop Limited, a UK private limited company. The transaction, which has been unanimously approved by both boards, is expected to close in Q2 2026, subject to regulatory approvals and customary closing conditions.
Key deal terms include:
- All-cash consideration with potential purchase price adjustments for working capital, cash, indebtedness, and transaction expenses
- Non-compete provisions restricting Etsy from competing in the C2C fashion marketplace space
- Brand continuity: Depop will retain its name, brand, platform, and "complementary culture" following the close
Etsy's House of Brands: A Strategy Unwound
When Etsy acquired Depop for $1.62 billion in June 2021, it was the centerpiece of an ambitious strategy to build a collection of niche marketplaces targeting different consumer segments.
That strategy has now been fully dismantled:
| Acquisition | Year Acquired | Outcome |
|---|---|---|
| Reverb (musical instruments) | 2019 | Sold 2025 |
| Depop (fashion resale) | 2021 | Sold 2026 |
| Elo7 (Brazilian crafts) | 2021 | Sold 2023 |
"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," said Kruti Patel Goyal, Etsy's CEO.
The sale price represents a 26% discount to what Etsy originally paid, crystallizing a loss of approximately $420 million on the investment. Etsy simultaneously announced a new $750 million share repurchase authorization.
Ask Fintool AI AgentWhy eBay: The Strategic Rationale
For eBay, Depop fills a critical demographic gap. While eBay's core marketplace skews older, Depop's user base is overwhelmingly young—nearly 90% of its 7 million active buyers are under age 34.
Depop by the numbers (2025):
- ~$1 billion annual gross merchandise sales (GMS)
- 7 million active buyers
- 3+ million active sellers
- ~60% year-over-year U.S. growth
"Depop has built a trusted, social-forward marketplace with strong momentum in the pre-loved fashion category, and we are confident that as part of eBay, Depop will be even more well-positioned for long-term growth," said Jamie Iannone, eBay's CEO.
The acquisition dovetails with eBay's own recommerce momentum:
- Fashion represents $10+ billion in annual GMV for eBay
- Pre-loved fashion delivered 10% YoY GMV growth in the U.S. in 2025
- eBay recently expanded its Authenticity Guarantee to cover apparel, shoes, accessories, and jewelry in Germany and the UK
eBay's Q4: Strong Results Back the Deal
The acquisition announcement came alongside eBay's Q4 2025 results, which beat expectations:
| Metric | Q4 2025 | YoY Change |
|---|---|---|
| Revenue | $2.97B | +15% |
| GMV | $21.2B | +10% |
| Non-GAAP EPS | $1.41 | +13% |
| Operating Margin (Non-GAAP) | 26.1% | -90 bps |
| Free Cash Flow | $478M | -15% |
eBay also announced:
- A 7% dividend increase to $0.31 per share quarterly
- An additional $2.0 billion share repurchase authorization
- Q1 2026 guidance: Revenue $3.00-$3.05B (13-15% FX-neutral growth), GMV $21.5-$21.9B (10-12% FX-neutral growth)
"2025 was a milestone year for eBay, and our results reflect the strength of our strategy and the disciplined execution behind it," said Iannone. "eBay is in the strongest position it has been in years."
Ask Fintool AI AgentExecution Risks and Integration
The deal isn't without challenges. eBay explicitly noted risks in its forward-looking statements related to "the time to close, and our ability to close, and subsequently realize the projected benefits from, the pending Depop acquisition."
Key integration considerations:
- Regulatory approvals: Required in multiple jurisdictions including the UK's CMA
- Cultural preservation: eBay committed to keeping Depop's brand, platform, and culture intact
- Technical integration: The sale agreement includes detailed provisions for transition services, shared contracts, and IP transfers
- Employee retention: Key personnel service agreements were executed concurrently with the deal
What to Watch
Near-term catalysts:
- Q2 2026: Expected deal close
- Post-close guidance: Whether eBay provides Depop-specific financial disclosure
- Integration milestones: Engineering resources scaling (Rackspace plans 250 Palantir-trained engineers within 12 months—eBay may take similar approach with Depop integration)
Longer-term questions:
- Can eBay monetize Depop's user base without alienating its community-driven culture?
- Will Depop's strong U.S. growth (60% YoY) translate into meaningful GMV contribution at eBay's scale?
- How will competitors like Poshmark (owned by Naver) and ThredUp respond?
Ask Fintool AI Agent