eBay will pay $1.2 billion in cash to buy Depop, the UK-founded app for pre-loved clothing, from Etsy. The transaction marks a reversal just five years after Etsy snapped up Depop for $1.6 billion.

Depop, launched in 2011, keeps its name, brand and platform intact under the new ownership, according to the companies. The marketplace ended last year with three million active sellers and seven million active buyers. Nearly 90% of those buyers are under 34 years old.

The sale taps into booming demand for used apparel. Shoppers increasingly turn to resale sites for cheaper, earth-friendly options over fast fashion giants. eBay sees Depop as a gateway to snag younger users hooked on social shopping.

“Depop has built a trusted, social-forward marketplace with strong momentum in the pre-loved fashion category,” eBay CEO Jamie Iannone said in a statement. “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.”

Depop CEO Peter Semple hailed the deal as proof of the platform’s rapid rise. “This transaction is testament to the significant growth we have delivered,” he said.

Etsy CEO Kruti Patel Goyal described the move as a win for everyone. “It’s a positive next step for all involved,” she said. “We are confident Depop is well-positioned for its next phase of growth as part of eBay.”

Wall Street reacted swiftly. eBay shares climbed more than 7% after the news. Etsy’s stock jumped nearly 15%.

The acquisition bolsters eBay’s push into resale fashion, a sector exploding amid sustainability drives and economic pressures. Depop’s community-driven model, heavy on Instagram-style feeds and direct seller-buyer chats, draws in Gen Z users who shun traditional retail.

Etsy bought Depop in 2021 to expand beyond handmade crafts into streetwear and vintage vibes. Now, offloading it frees Etsy to refocus while handing eBay a ready-made youth magnet. The all-cash payout values Depop lower than Etsy’s purchase price, reflecting market shifts or strategic pruning.

Analysts point to resale’s tailwinds. Global second-hand clothing sales hit $177 billion last year and could double by 2027, according to ThredUp’s latest report. Depop’s 10 million users worldwide put it in prime position to ride that wave.

eBay, with its vast auction ecosystem, plans to blend Depop’s flair with its logistics muscle. Expect cross-promotions and shared tech to juice growth. For now, Depop runs independently from eBay’s San Jose headquarters.

The deal awaits regulatory nods but faces no big hurdles, sources close to the talks said. Closure by June or July seems likely, paving the way for Depop’s integration.