Depop was acquired by Etsy for $1.625 billion in cash in June 2021, representing a significant premium for the Gen Z-focused fashion resale marketplace.

Prior to the acquisition, Depop raised approximately $105 million in venture capital funding. The company's final independent funding round was a $62 million Series C in June 2019 led by General Atlantic.

The company had raised just over $100 million in total known funding before being acquired by Etsy.

Depop is a mobile-first peer-to-peer marketplace where users can list, discover, and buy secondhand fashion items. The platform combines social media elements with e-commerce functionality, creating a unique shopping experience for Gen Z consumers.

Users create profiles that function both as personal shops and social feeds, complete with bios, avatars, and follower counts. The listing process has been streamlined with AI-powered tools that automatically generate titles, descriptions, categories, and tags from uploaded photos.

The platform now includes integrated photo editing capabilities powered by Photoroom, allowing sellers to remove backgrounds and adjust lighting without leaving the app. Sellers can upload up to four photos or import videos, choose shipping options including discounted Depop labels, and set fixed prices with the option to accept offers.

Discovery happens through a personalized home feed powered by machine learning that analyzes users' last 300 interactions and surfaces approximately 600 relevant items from millions of available listings. The algorithm re-scores recommendations multiple times daily to maintain relevance.

Buyers can search and filter by size, brand, era, and other criteria, save items through likes, and negotiate prices through an offer system that now accounts for over 40% of all transactions. The platform includes buyer protection coverage and holds funds until delivery confirmation.

Depop operates as a two-sided marketplace connecting fashion sellers and buyers, primarily targeting Gen Z consumers interested in secondhand and vintage clothing. The platform uses a B2C go-to-market approach, acquiring users through social media marketing and word-of-mouth growth.

The company shifted from a seller-fee model to a buyer-fee structure in 2024, eliminating the 10% commission that sellers previously paid. Revenue now comes from a marketplace fee charged to buyers at checkout plus payment processing fees, creating a more seller-friendly environment while maintaining monetization.

This fee structure change was designed to increase inventory supply by lowering barriers for new sellers while shifting costs to buyers who benefit from purchase protection and platform services. The model creates a flywheel where more sellers attract more buyers, and vice versa.

Depop also monetizes through Boosted Listings, an advertising product where sellers pay an 8% fee only when buyers who interacted with promoted items make purchases within 28 days. This performance-based advertising model aligns seller costs with actual sales outcomes.

The platform benefits from network effects as larger user bases create more selection for buyers and more potential customers for sellers. Social features like following, liking, and profile customization increase engagement and retention beyond simple transaction completion.

Vinted represents Depop's most direct European competitor, having eliminated seller fees years earlier and achieving €813 million in revenue with €95 million in profit during 2024. The platform reached a €5 billion valuation through a TPG-led secondary offering and has expanded beyond fashion into multiple categories.

Mercari removed seller fees in the US market in March 2024, positioning itself as a low-cost alternative while adding AI-powered listing assistance and expanding into digital goods. The platform's zero-fee structure combined with buyer service fees creates direct pricing pressure on Depop's model.

Both competitors benefit from established user bases and proven unit economics under fee-free models, forcing Depop to demonstrate superior user experience and engagement to justify any pricing differences.

Poshmark has returned to profitability under Naver ownership and monetizes through promoted listings and live video features, serving over 150 million users with more than $10 billion in lifetime GMV. The platform's social features and community-driven approach compete directly with Depop's social commerce positioning.

TikTok Shop achieved 120% year-over-year GMV growth in 2025 and launched a pre-owned luxury category, leveraging its massive user base and video-first discovery model. The platform's integration with TikTok's content ecosystem provides unique distribution advantages.

Instagram and Meta's shopping features allow users to discover and purchase items without leaving familiar social platforms, creating competition for attention and transaction volume.

The RealReal, eBay, and GOAT focus on higher-value items with authentication services and professional logistics infrastructure. These platforms compete for premium fashion resale while offering buyers additional trust and security features.

eBay's massive scale and established marketplace infrastructure provide competitive advantages in search, payments, and seller tools, though its broader focus dilutes attention from fashion-specific features that appeal to Gen Z users.

AI-powered listing tools represent a significant opportunity to reduce friction for new sellers while improving listing quality and discoverability. Depop's integration of automated description generation and photo editing capabilities can increase conversion rates and expand the addressable seller base.

Authentication services for higher-value streetwear and designer items could allow Depop to capture more premium transactions while building additional trust with buyers. This would enable expansion into luxury resale segments currently dominated by specialized platforms.

Buy-now-pay-later integration and repair or alteration services could increase transaction values and capture more of the circular fashion value chain, creating additional revenue streams beyond marketplace fees.

Scaling beyond Gen Z to reach older millennials and broader style segments represents significant growth potential, particularly as the platform's original user base ages and gains purchasing power. Marketing efforts targeting these demographics could substantially increase the addressable market.

Brand partnerships and collaborations with fashion companies create opportunities to reach brand-loyal consumers who might not otherwise engage with peer-to-peer resale. These partnerships also provide content and marketing opportunities that can drive user acquisition.

Corporate sustainability programs and institutional buyers represent emerging opportunities as companies seek to support circular economy initiatives and offer employee benefits related to sustainable fashion consumption.

International markets beyond the core US, UK, and Australian bases offer substantial growth potential, particularly in continental Europe and high-growth Asian fashion markets like Japan and South Korea. The removal of seller fees and multilingual AI capabilities reduce localization barriers.

EU circular economy regulations requiring separate textile collection by 2025 and upcoming digital product passport requirements create regulatory tailwinds for legitimate resale platforms that can demonstrate compliance and sustainability impact.

Emerging markets with growing middle classes and increasing fashion consciousness represent longer-term expansion opportunities, particularly as mobile commerce infrastructure develops in these regions.

Fee acceptance: The shift to buyer-side marketplace fees creates ongoing risk that price-sensitive Gen Z consumers will migrate to completely fee-free alternatives like Vinted, particularly if the value proposition of buyer protection and platform features doesn't justify the additional cost at checkout.

Platform competition: TikTok Shop and other social media platforms with massive existing user bases can leverage their content and discovery advantages to capture fashion resale transactions without users needing to download or engage with a separate app, potentially commoditizing Depop's social commerce model.

Market saturation: The fashion resale market faces increasing competition from both established players and new entrants, while the finite supply of desirable secondhand items creates natural constraints on inventory growth that could limit long-term scaling potential as the market matures.