🛍️ Etsy’s $1.6B play for Gen Z


June 7, 2021

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The big idea
Etsy

Etsy buys ticket to the cool kids’ table with $1.6B Depop acquisition

Last week, Etsy — the internet’s craft fair — announced its acquisition of London-based shopping platform Depop for $1.625B in a “mostly cash deal.

It’s Etsy’s largest acquisition ever, and it’s significant for 2 reasons:

  1. It’s a massive boost of confidence for European ecommerce startups
  2. It signals an acquisition appetite for companies marketing to Gen Zers

C’mon, the kids have style these days

Depop is a marketplace for buying and selling secondhand clothing via an app.

What sets the company apart from similar marketplaces is its intentional Gen Z appeal. Its sellers operate like influencers, often modeling their own clothes and using platforms like Instagram and TikTok to increase the reach of their Depop storefronts.

The Z-sauce is working, per the company’s 2020 numbers:

  • $70m in revenue
  • 4m buyers and 2m sellers, ~90% of whom are under 26

The big business of secondhand fashion

While Etsy is known for its marketplace of handmade goods and things your drunk aunt impulse buys, the Depop acquisition gives Etsy a seat on a larger macrotrend: secondhand clothing.

According to a report from ThredUp — another thrift wunderkind — the total market for secondhand clothes is expected to reach $64B by 2024, rocketing from $28B in 2019.

Plus, Depop touts the sustainable benefits of reducing clothing waste, something that resonates strongly with climate-minded young’uns.

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SNIPPETS

The EU and Bill Gates announced a new partnership to spend $1B on clean tech, with funds deployed over 5 years (2022-2026). #clean-energy

Marqeta — which provides tech for fintech firms to issue cards (e.g., Square) — is eyeing a $12B+ IPO. #fintech-cryptocurrency

Aurora — the self-driving startup spun out of Uber — may go public at a $12B valuation by merging with a SPAC founded by Reid Hoffman, LinkedIn’s founder. #emerging-tech

The Biden administration is itching to cut a deal with the EU on how user data can be transported across the Atlantic. #privacy

Athleisure is on a tear, with Lululemon reporting an 88% YoY revenue gain in its latest quarterly report. #ecommerce-retail

Apple wants workers back at the office 3 days a week starting September. Its employees are pushing back for more flexible options (read: WFH forever). #big-tech

What’s next for retail?
Warby Parker store

”How can eye help you?” (Source: Warby Parker)

Warby Parker sets its sights on more in-person retail

New York-based glasses and contacts retailer Warby Parker made a splash with its ecommerce model when it launched in 2010.

Now, the startup — valued in August at $3B — is expanding a brick-and-mortar path. It’s adding 35 new stores in 2021 on top of its existing 140.

Why in-person and why now?

Warby Parker’s customer transactions…

… are pretty evenly split between in-store and online, co-founder Neil Blumenthal tells The Hustle. But ~75% use both (AKA hybrid shoppers).

They look at frames online before an eye exam or try on glasses at a store before buying online. During the pandemic, online sales for glasses (and basically everything else) increased as in-person retail temporarily shuttered.

But in recent weeks, in-person sales have rebounded…

… And landlords are still flexible on rents

Retail Dive spoke with analysts who say it’s a great time for digitally native brands to get into physical retail while landlords are offering good deals.

Likewise, Blumenthal also told The Wall Street Journal that Warby Parker has been able to negotiate with landlords, reducing risk.

So, what makes a good retail experience?

A one-stop shop that’s fun.

Beauty brand Glossier attracted customers with its Instagram-friendly design, as did mattress company Casper with its napping pods.

Warby Parker stores offer eye exams, glasses, contacts, and accessories, plus original artwork.

And sometimes bike racks shaped like glasses:

Source: Hudson Reporter

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By the Numbers
plane

Concorde, the OG supersonic jet (Source: Getty Images / Evening Standard)

Digits: Supersonic planes, 100+ unicorns, and Isaac Newton’s notes

  • United Airlines wants 15 supersonic airliners from Boom Supersonic, with an eye on 35 more. With delivery slotted for 2029, Boom is sourcing sustainable jet fuel to help US airlines achieve net-zero emissions by 2050.
  • Nestlé acknowledges that ~70% of its food products aren’t healthy, having <3.5 stars on Australia’s health star rating system. Drinks were worse, with 96% of its beverages failing to meet the 3.5 star threshold.
  • London’s Firstminute Capital is the 1st VC fund backed by 100+ unicorn founders. 2020 was a record year for European startups with $41B in funding. Q1 2021 saw $20B flow in, more than doubling YoY.
  • Amazon changed its terms of service after crafty lawyers filed 75k+ customer arbitration demands, triggering a bill for “tens of millions of dollars in filing fees… payable by Amazon under its own policies.”
  • After burning for ~2 weeks, the cargo ship, “X-Press Pearl,” sank off the coast of Sri Lanka. With 1,486 containers onboard, including 78k kg of plastic pellets and 25 tons of nitric acid, it’s an environmental nightmare.
  • Two pages of Isaac Newton’s handwritten notes are expected to fetch $850k-$1.3m at auction next month. Meanwhile, a small sketch of a bear head by Leonardo da Vinci is expected to bring in ~$11m-$17m the same day.
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Crypto Madness
Ethereum miner

We have no idea if this is what an Ethereum miner looks like (Source: NurPhoto / Getty Images)

Norton antivirus adds an Ethereum mining feature to its latest release

In the future, everybody is a crypto miner.

At least according to cybersecurity firm NortonLifeLock, which will now include an Ethereum mining feature — Norton Crypto — in its popular antivirus software Norton 360.

Why is an antivirus software adding cryptocurrency mining?

Part of the reason: In order to mine cryptocurrency, users are often required to remove certain security settings on their desktops.

Finding a reliable miner online is a sketchy prospect. Available programs often have unvetted code, exposing users to unnecessary risk or potential hijacking of their computing power — dubbed “cryptojacking.”

Norton’s solution allows Norton 360 customers to easily mine crypto during periods of computer “idle time.”

The release baffled some tech commentators…

… who theorized a future where companies pre-install miners on subsidized computers, sucking the public’s electricity and keeping the mined profits for themselves.

The amount of currency generated from Norton Crypto is likely to be small, and Norton will take a 15% cut. Norton also announced a secure, cloud-based wallet for storing mined funds and transferring them to Coinbase.

Technology, it seems, is moving from pre-installed antivirus to pre-installed crypto-wallet.

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Meme of the day
Etsy sellers meme

Source: Pinterest

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