It has been announced that Etsy Inc. (NASDAQ: ETSY) has acquired the popular Depop platform among young users. A successful acquisition can help expand the ecosystem and introduce the company to a new market.
Depop acts both as a social network and a platform for selling fashion accessories and apparel. There are pages where users can follow new items for sale posted by sellers. In the beginning, the site served as a social media network for readers of PIG magazine to purchase products designed by young designers featured in the magazine.
The growth of Depop has made it one of the most popular marketplaces for Generation Z shoppers, ranking tenth in US shopping sites. According to reports, Etsy paid $1.625 billion for Depop, mainly in cash. Compared to the platform’s annual revenue, this price represents over 20x. Depop’s gross revenue last year was $70mln. Gross sales last year were $650mln.
As a result of the acquisition of Depop, Etsy Inc. (NASDAQ: ETSY) believes the company will access a unique marketplace that offers many special items. The online music instruments company Reverb was acquired by Etsy for $ 275 million two years ago. Etsy’s efforts in this regard have led to significant increases in sales and profits on Reverb since then.
Since last year, Etsy has sold 50% more goods than it had last year. Now that Etsy has partnered with Depop, it probably thinks it can repeat this success. Etsy acquired all of its acquisitions to increase its capabilities and become a large, diversified company.
At the close of trade, Etsy Inc. (NASDAQ: ETSY) stock had increased 1.12% to $170.21, a gain of $1.89. The stock fluctuated between $166.36 and $171.90 throughout the day. A total of 2.62 million shares were traded, less than the average volume of 3,02 million per day over the previous 50 days and less than the average volume of 3.29 million for the entire year. Its stock has increased 122.58% over the past 12 months, and it has gained 4.13% over the last week. Stock prices have gained 9.79% in the previous six months, and supply has decreased by 17.69% over the last three months. During this year, shares have returned -4.33%. Moreover, the stock’s current price-to-earnings is 49.29.