Etsy is selling Depop, a secondhand clothing app popular with Gen Z and millennials, to eBay for $1.2 billion in cash, the company announced on Wednesday. Etsy says the deal will allow it to focus on its own marketplace.

The deal comes nearly five years after Etsy acquired Depop for $1.62 billion, at a time when secondhand clothing apps were gaining in popularity.

Founded in 2011, Depop generated approximately $1 billion in gross merchandise sales — the total value of goods sold through its platform — in 2025. In the U.S., the company saw nearly 60% year-over-year growth. As of December 31, 2025, the marketplace had seven million active buyers, nearly 90% of whom were under 34, and more than three million active sellers.

“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, benefiting from our scale, complementary offerings, and operational capabilities,” said eBay CEO Jamie Iannone in the press release.

The move comes as Etsy has struggled to grow its business after the pandemic-era e-commerce boom, competing with marketplaces like Temu and Shein, as well as Amazon.

The company’s year-over-year revenue grew 2.2% in 2024, down from 7.1% growth reported in 2023. Etsy is scheduled to release its 2025 earnings on Thursday.

“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 Etsy CEO Kruti Patel Goyal in the press release. “We are proud of what the Depop team has built – a truly differentiated brand and product, grounded in clear purpose and strong community – becoming one of the fastest-growing fashion resale marketplaces in the U.S. I am confident that Depop is well-positioned for its next phase of growth as part of eBay.”

The sale is the latest in a pattern of Etsy acquiring and then divesting niche online marketplaces. Etsy’s sale of Depop comes as the company has purchased and then sold other niche online marketplaces in recent years, including Brazilian e-commerce company Elo7 and musical instrument marketplace Reverb.

The deal is expected to close in the second quarter of this year.