The “pre-loved” fashion app Depop was snapped up last week by US giant Etsy for £1.2bn. A favourite of Gen Z, Depop was founded by Anglo-Italian entrepreneur Simon Beckerman in 2011. Its sales more than doubled to £49m during the pandemic.
Weird name – what’s all that about?
It’s a portmanteau, taken from the French word for storehouse – “dépôt” – and “popular”. Gen Z, born between 1997 and 2015, love a word mash-up as much as they love recycled clothing. As the company’s 47-year-old founder told Artefact magazine recently: “We are trying to create a very cool community.” Boomers, step away.
So how popular is the app?
Big, and getting bigger. It’s the 10th most visited shopping site among Gen Z consumers in the US. More than 90% of Depop’s 30 million users in almost 150 countries are under 26. The business has offices in London, Manchester, New York, LA and Sydney, and about 400 employees.
How much will Beckerman make from the sale?
About £45m, according to The Guardian. A decade of giving away shares to raise funds has left him owning just 4% of the business. Still, a £45m windfall from persuading teens to resell their smelly old trainers and designer jumpers is not to be sniffed at. Depop’s CEO, Maria Raga, will doubtless make a tidy profit, as will venture capital firms General Atlantic, Creandum, Octopus Ventures and Balderton Capital, which all have a stake in the company.
Tell me more about the founder
Not much is known about Beckerman’s early life, but he ran a youth magazine as well as a fashion eyewear label, Retrosuperfuture, and was looking for an online retail platform when he founded Depop in 2011. He knew how wedded Gen Z are to their phones and social media; his genius lay in getting them together in one online community to sell stuff to each other. Announcing the deal last week, Josh Silverman, Etsy’s CEO, told investors that Gen Z will account for a quarter of the global workforce by 2030 – an estimated 1.3 billion workers. After the sale was confirmed, Beckerman said Depop’s attraction lay in “the power of genuine human connection. And it is the people themselves that make being part of the business such a great experience.”
How did he turn unwanted teenage clothes into so much cash?
Intuition and word of mouth. He once said he considers himself an “Apple” kind of guy. Apple has dispensed with data and surveys, and doesn’t want to know what people want – it just thinks it knows. Similarly, Beckerman grew up in a design and fashion environment, and has an innate understanding of what is cool. He savvily went for investors with a history of investing in his type of market and partnered early on with influencers, including Chiara Ferragni, an Italian blogger and model. She is worth $10m, is a Depop shareholder and has 23.8m Instagram followers, while Depop has only 716,000. It helps to have friends in high social media places.
Any more nuggets on how to run a successful start-up?
“Read, read, read” – mostly newsletters. One of Beckerman’s favourites is by Benedict Evans, an ex-VC at Andreessen Horowitz. As for books, he recommends The Hard Thing About Hard Things by Ben Horowitz and, if you’re stuck on marketing, The Innovator’s Dilemma by Clayton Christensen. Beckerman once told Artefact: “People think things are too difficult, but it doesn’t mean you can’t do it. If you have an idea, learn how to make it. If you have the enthusiasm and ambition, you can learn how to do it all.” He also suggests lots of sleep and no carbs. “I sleep at least seven and a half hours each night, because I realised how unproductive I become if I don’t sleep enough. I cut down on carbs because they make me sceptical.”
Interesting. Is there any downside to this story?
In November 2019, the website Business of Fashion claimed Depop sellers were being stalked by creeps with no interest in helping them declutter their wardrobes. A seller called Lily Garcia revealed: “Inquiries that I thought were supposed to be about my items were instead about my feet, my body, or if I could wear the clothes a few more times before I sold.” The internet is full of weirdos. On the upside, we have Depop to thank for an unrelated Instagram account called @DepopDrama (609,000 followers), which reveals the craziest excuses and pleas of poverty made on the app. Here’s a sample exchange: “What’s the lowest you’ll go on this?” “£90.” “Please we want to bury my nan in it and she only left me £75.”
Teens and their excuses 🙄. What’s next for Beckerman?
Gen Z’s other big obsession – food. In April he tweeted: “Setting up a new company in the food space. It’s going to be exciting. More about it soon…” Watch out for the launch of “Delli”.
More bubble tea, anyone?