EBay’s Secondhand Depop Buy

EBay struck a bargain this week with its agreement to purchase Depop, the popular secondhand clothing resale app, for $1.2 billion in cash. That’s less than the $1.63 billion Etsy paid for Depop five years ago. 

There’s a reason eBay got a good deal. Even while Depop increased its total sales last year by roughly 25% to $1 billion, Etsy had been spending heavily on marketing the U.K.-founded garment reseller to U.S. shoppers. This spending weighed on Etsy’s adjusted margins on earnings before interest, taxes, depreciation and amortization, which slipped to 25.2% last year from 27.8% the year before.