Etsy, the US-based online sales app, has struck a deal to buy Depop for £1.1 billion.
The deal for the British secondhand clothing app is expected to be completed by the end of 2021.
The marketplace for pre-owned clothes has taken off during the Covid pandemic, as people declutter their lives.
It is also seen as a greener and cheaper option to buying new clothes by an environmentally conscious generation of consumers.
So let's take a look at what Depop is, who founded the company and why Etsy has decided to splash out on the app.
What is Depop?
Depop was set up as a secondhand fashion resale app at a time when apps were new territory for a lot of designers.
Over the years it has forged a reputation among younger customers who use the marketplace to trade clothes around the world.
More than 90% of Depop's customers are under the age of 26 - a demographic known as Generation Z, of people born in the mid-90s
Depop is known for vintage fashion - popular with a new wave of online influencers - with more than 30 million users across 150 countries.
Who owns Depop?
Depop was founded by entrepreneur Simon Beckerman in 2011.
Beckerman set up the app while working at an Italian fashion mag PIG and currently owns 4% of the shares of the business.
The deal with Etsy will see Beckerman, who had previously said he would "love to sell the company for £1 billion" bag around £45 million.
The online business employs around 400 people across its global operation with offices in London, Manchester, New York, Los Angeles and Sydney.
Why is Etsy buying Depop?
Etsy, which specialises in craft and handmade items, is purchasing Depop to essentially tap into a younger customer marketplace.
The online retailer appealed to the Millennials when it was first launched in 2005 but has seen its average user age over that time to 39 now.
The purchase of Depop opens the door to a new generation of customers and a new marketplace for Etsy and its independent businesses.
There is around a £30 billion global market for secondhand clothes – which is reportedly 2% of the total apparel market.
It is a market which is expected to grow between 15 and 20 per cent annually over the next five years, according to the Boston Consulting Group.
Who is Depop's competition?
The trend of recycling clothes for money has been accelerated by the pandemic, with large proportions of the retail sector having to endure shop closures.
Some of those shops are reopening, while others won't, as businesses evolve towards an online approach to suite the needs of its customers' changing habits.
Depop is not alone in seeing a spike in interest over the past 12 months or so, with Europe's largest secondhand site valued at £2.2 billion in May 2021.
US competitor Poshmark saw its valuation reach £2.5 billion when it was floated on the stock market in January 2021.