A DJ performs at the launch of the 3 month pop-up from the social shopping app Depop at Selfridges on August 01, 2019 in London, England.

David M. Benett | Getty Images

Ecommerce company Etsy announced on Wednesday that it is buying secondhand fashion app Depop for $ 1.62 billion.

Founded in the UK in 2011, Depop enables people to buy and sell used clothing through its online marketplace. The company has attracted a predominantly younger audience thanks to its knowledge of social media and its green and ethical shopping messages.

Depop has approximately 30 million registered users in 150 countries. Josh Silverman, CEO of Etsy, said the company is “excited” that Etsy is adding the “Gen Z Consumer Resale House” it believes.

“Depop is a vibrant, two-way marketplace with a passionate community, a highly diverse range of unique items, and we believe there is significant potential for further scaling,” Silverman said in a statement on Wednesday.

“We see significant opportunities for shared know-how and growth synergies in what will now be an enormous ‘House of Brands’ portfolio of individually different and very special e-commerce brands.”

Depop CEO Maria Raga said in a statement that Depop is “where the next generation comes to discover unique fashion and be part of a community that is changing the way we shop.”

She added, “Our community is made up of people creating a new fashion system by establishing new trends and making new out of old. They come to Depop for the clothes, but stay because of the culture. “

Etsy said the transaction is primarily cash and is “subject to certain adjustments for Depop’s working capital, transaction costs, cash and debt, and certain deferred and nontransferred equity for Depop’s management and employees.”

Etsy expects to close the deal by the third quarter of 2021. Depop will keep its headquarters in London, Etsy said and operates as a standalone company run by current management.

The transaction is the largest ever acquisition for Etsy, which went public on the New York Stock Exchange in 2015.

The Etsy share has roughly doubled in the past 12 months thanks to an e-commerce boom as a result of the coronavirus pandemic. However, the stock is down 5% since the start of the year. Etsy stocks fell slightly in pre-market trading in the United States.

Before agreeing to sell to Etsy, Depop had raised a total of $ 105.6 million from investors including General Atlantic, Creandum, Balderton Capital, Octopus Ventures and Klarna CEO and co-founder Sebastian Siemiatkowski, according to Crunchbase.