Etsy has agreed to sell second-hand fashion platform Depop to eBay for $1.2 billion, marking a strategic shift for both companies in the growing re-commerce market.

The online marketplace, which acquired the UK-founded Depop for $1.6 billion five years ago, is offloading the business in an all-cash deal expected to complete by the middle of this year. Depop will retain its name and branding under eBay’s ownership.

eBay said the acquisition would help it “reach a younger demographic across the expanding re-commerce landscape”. Nearly 90% of Depop’s seven million active buyers are under 34, according to Etsy, and the platform also counts more than three million active sellers.

Chief executive Jamie Iannone said the deal would strengthen eBay’s position in pre-owned clothing, describing the category as one of its “fastest-growing”.

Depop has been one of the earlier entrants in the fashion resale app market, but increased competition with other platforms, such as Vinted, has affected its valuation. 

The announcement coincided with eBay’s 2025 financial results, which showed revenues rising 8% year-on-year to $11.1 billion. Etsy’s share price rose more than 15% in after-hours trading, while eBay’s increased by nearly 6.5%.

Kruti Patel Goyal, chief executive of Etsy, said Depop has become “one of the fastest-growing fashion resale marketplaces in the US” and added, “I am confident that Depop is well-positioned for its next phase of growth as part of eBay.”