Great post! Solid analysis. What do you see as the biggest vertical gap for Etsy? They have handmade, vintage, clothes, musical instruments... any thoughts on what vertical/category they're missing and would be looking to fill via M&A?
Good post. I wonder if they overpaid for Depop in particular though. Based on recent earnings calls seems like their GMV has fallen off significantly due to reopening effects, so they potentially paid an inflated amount for it in the peak of COVID. As you said, most M&A destroys value. Time will tell.
Thanks, Punch Card Investor. Paying a double digit revenue multiple means a lot of things need to go right for Depop to work out. IMO, Etsy's right to win is less clear in fashion resale vs. something nichey like used instruments (Reverb) or market consolidation (DaWanda). It's a super competitive space too: Poshmark, RealReal, etc.
Great post! Solid analysis. What do you see as the biggest vertical gap for Etsy? They have handmade, vintage, clothes, musical instruments... any thoughts on what vertical/category they're missing and would be looking to fill via M&A?
Thanks, Thomas. I wouldn't be surprised to see them do more M&A to build out their international footprint like DaWanda (Germany) and Elo7 (Brazil).
Good post. I wonder if they overpaid for Depop in particular though. Based on recent earnings calls seems like their GMV has fallen off significantly due to reopening effects, so they potentially paid an inflated amount for it in the peak of COVID. As you said, most M&A destroys value. Time will tell.
Thanks, Punch Card Investor. Paying a double digit revenue multiple means a lot of things need to go right for Depop to work out. IMO, Etsy's right to win is less clear in fashion resale vs. something nichey like used instruments (Reverb) or market consolidation (DaWanda). It's a super competitive space too: Poshmark, RealReal, etc.