get thrifty, and your startup might just acquire a generation

Etsy's Acquisition of Depop: A Shift in Social Shopping

This week saw Etsy, a well-known online marketplace for handmade and unique items, complete the acquisition of Depop, a platform focused on resale and vintage goods, for a sum of $1.625 billion. This event provides valuable insight into the changing dynamics of social commerce and consumer preferences.

Understanding Depop's Appeal

Depop, headquartered in London, primarily caters to the millennial and Gen Z demographics. Over the last two years, the platform has experienced significant growth, expanding its user base from 13 million to 21 million. Notably, approximately 90% of Depop’s users are reported to be under the age of 26.

Etsy's Strategic Move

Through this acquisition, Etsy aims to connect with a younger audience that values thrifting and individual expression over mainstream fast fashion. However, simply adding Depop’s user base isn’t the full extent of the potential. Etsy now has the chance to innovate significantly in how it integrates and streamlines operations across both platforms.

• Etsy has finalized the acquisition of Depop, a UK-based social selling platform, for $1.625 billion in a predominantly cash transaction.
• The purchase represents Etsy’s attempt to engage with younger consumers, signaling a $1.6 billion investment in the Gen Z market.

Modernizing the User Experience

Etsy must explore additional methods to enhance its user experience, extending from the homepage to the checkout process, beyond simply increasing the variety of available products. This is crucial because, as someone within that demographic, Gen Z consumers are known for their impatience.

While thrifting is currently popular, so is the convenience of platforms like Amazon. This generation appreciates both unique, creative items and affordable prices with rapid delivery. Although some consumers favor one extreme or the other, the majority likely seek a balance between these preferences.

Investing in Social Shopping

Secondly, both Etsy and Depop are positioned to capitalize on the increasing trend of social shopping experiences. The emergence of companies like The Landing, which utilizes collaborative mood boards as a shopping tool, highlights this potential.

The Landing allows users to create mood boards featuring products they can then purchase directly. Initially focused on interior design, this concept can be readily expanded to include clothing and other consumer goods. Like Pinterest, The Landing caters to consumers who enjoy a visually-driven, collaborative shopping experience.

While a complete transformation into an early-stage startup isn’t necessary, it would be beneficial for Etsy to explore innovative ways to enhance the shopping experience within its expanded marketplace.

Looking Ahead

Ultimately, successfully serving Gen Z requires more than just market acquisition. As one observer noted, Etsy is “ensuring the brand translates through different generational ethos” with this purchase. It will be fascinating to observe how this case study unfolds.

Further discussion in this newsletter will cover digital health, the intricacies of S-1 filings, and a recent memo from Medium that prompted employee departures. You can reach me on Twitter @nmasc_. I welcome tips regarding early-stage deals or noteworthy events; please feel free to DM me or email me at natasha.mascarenhas@techcrunch.com.

A Lag in Digital Health: The Case of PCOS

Recent trends suggest a significant surge of interest among startups to enter the digital health space, as evidenced by the volume of invitations received. TechCrunch has previously reported on the expansion within health technology, but a specific question has remained at the forefront: why is there a relative lack of startups focused on Polycystic Ovary Syndrome (PCOS)?

This condition, affecting approximately one in ten women, appears ideally suited to the growing emphasis on personalized medicine approaches. A thorough investigation was therefore undertaken to understand this disparity.

Significant Opportunity, Emerging Challenges

The research revealed a substantial potential market for startups specializing in hormonal health. However, the sector remains underdeveloped, hindered by a combination of scientific complexities and prevailing social stigmas.

Hormonal health presents a unique area for innovation, but progress is currently limited.

Related TechCrunch Coverage

Further insights from TechCrunch include:

• An exploration of the expansive nature of the sports tech industry, extending beyond mere athletic applications.
• An analysis of how digital transformation is fundamentally altering various market landscapes.
• A discussion on the critical financial implications of slowing growth rates for businesses.

These articles provide a broader context for understanding the current dynamics within the technology and healthcare sectors.

Initial Public Offerings

The Equity team has dedicated approximately 3% of our total recording time anticipating the S-1 filing from Robinhood. As of now, these anticipations have not materialized. However, we have other developments in the public market to discuss while we continue to await that event.

Recent IPO Filings

Confluent’s S-1 filing indicated a deceleration in growth, despite a strong track record of expansion. This suggests a potential shift in the company’s trajectory.

Sprinklr’s IPO documentation highlighted inconsistent cash flow, though it also demonstrated notable growth figures. This presents a mixed picture for potential investors.

SPAC Listings

Acorn, a widely recognized consumer fintech company, became publicly traded through a Special Purpose Acquisition Company (SPAC). This method offers an alternative route to the public markets.

• The filing from Confluent suggests a possible moderation in their previously rapid growth rate.
• Sprinklr’s financial disclosures reveal fluctuations in cash flow alongside positive growth indicators.
• Acorn’s decision to list via a SPAC represents a different approach to becoming a publicly traded entity.

These recent events provide valuable insights into the current state of the IPO market. They demonstrate the diverse strategies companies are employing to access public capital.

Continued monitoring of these and other filings will be crucial for understanding emerging trends and potential investment opportunities. Public market news remains a dynamic area of focus.

Challenges at Medium

Recent reporting has highlighted new difficulties at Medium, a company that has experienced numerous challenges and strategic shifts throughout its history.

In April, Ev Williams, the CEO of Medium, circulated a company-wide memo addressing the organization’s culture. A number of employees contend that the memo’s underlying message has fostered an insecure and compliant workplace, leading to increased staff departures.

Specifically, out of the 241 individuals who initially joined Medium, approximately half have since left the company.

Key Takeaways: Like Coinbase and Basecamp, Medium’s cultural memo prompted employee resignations following a perceived shift in the company’s core mission.

However, in contrast to those other companies, the tone of Medium’s memo was more nuanced, and the situation was further complicated by a recently unsuccessful attempt at unionization.

Regarding early-stage startups:

• A startup in its initial phases has opted to seek venture capital funding to expand its business, which provides services to support unionization efforts nationwide.
• This presents an inherent contradiction, but CEO James White articulated the rationale behind his belief that a large-scale technological solution remains necessary within a flawed system.
• He believes there is continued demand despite the complexities.

Equity Podcast & TC Sessions: Mobility Update

We value your feedback, Equity community! The Equity podcast team has launched a survey designed for our listeners. Completing this brief survey will greatly assist us in enhancing the show to better meet your preferences.

• You can access the Equity podcast listener survey at this link, and participants may be eligible to receive a special prize curated by the Equity team.

Furthermore, TC Sessions: Mobility is scheduled for next week. This event focuses on the latest advancements in transportation and related technologies.

Why Attend TC Sessions: Mobility?

There are several compelling reasons to attend this event. It provides a comprehensive overview of the future of movement and innovation.

• The event covers a wide range of topics related to the mobility sector.
• Attendees will have the opportunity to network with industry leaders.
• TC Sessions: Mobility showcases cutting-edge technologies and startups.
• Insightful discussions and presentations will be featured throughout the event.
• Don't miss the chance to gain valuable knowledge about the evolving landscape of transportation.

Tickets are still available, so secure your spot today to experience this important event firsthand.

Weekly Tech Roundup

Featured on TechCrunch

• Katerra, a construction company supported by SoftBank, is reportedly ceasing operations despite significant funding.
• Prosus has finalized the acquisition of Stack Overflow for a reported $1.8 billion.
• An insightful email provides a comprehensive explanation of Apple's strategies.
• Café is a new tool designed to assist hybrid workplaces in managing in-office scheduling.
• European authorities are pursuing an independent approach to digital identity frameworks.

Highlights from Extra Crunch

• Three perspectives are offered regarding the evolving landscape of meetings.
• Guidance is provided on securing positions on consulting boards and navigating deal structures with private equity and venture capital firms.
• Key takeaways are shared from a $6.3 million fundraising round involving 50 investors.
• Choosing to pursue a debut round can potentially accelerate growth from a Series A to a Series B valuation.

We will connect again next week.

N