At Octopus, we invest in small companies that want to change the world for the better. The Octopus Ventures team is built to invest in tech-focused companies in four areas we believe will have the most impact on our future: health, money, deep tech and consumer technology. Depop is one of the companies we’ve backed in for several years.
Depop is on a mission to empower the next generation to transform fashion. Through their app, a global community of more than 25 million people buy and sell clothes, accessories and other fashion items. Described as a cross between eBay and Instagram, Depop’s marketplace gives creative sellers a route to market for their fashion collections. Sellers can re-sell items bought elsewhere or through Depop, or pieces they’ve created themselves. All Depop users can buy these items directly from the app, plus can follow other users and get personalised recommendations. The company makes money by taking a 10% cut of sales made, which is estimated to be more than $500 million since launch.
With a huge following among creative influencers and makers, Depop is on a journey to make fashion more inclusive, more diverse and more sustainable. In a recent TechCrunch article, Depop CEO Maria Raga explained, “Our mission is to redefine the fashion industry in the same way that Spotify did with music, or Airbnb did with travel accommodation.”
The company was born in 2011 and has shown impressive growth in the years since. In 2017, Octopus first invested in Depop, leading a round of investments that totalled $20 million. We invested again in 2019, contributing to Depop’s $62 million investment, and the company has continued to go from strength to strength. With a wide portfolio of companies, the Octopus team has a strong track record in accelerating the growth of lifestyle and marketplace businesses, making for a strong partnership with Depop.
From marketplace to millions
Depop originally began as a social network in 2011. Founder Simon Beckerman also co-founded PIG magazine, a publication that showcased new creative talent in fashion, cinema and design, and Depop started its life as a place for readers to buy products featured in PIG. Simon quickly realised the potential for sellers too. He developed the app into a global marketplace where users could see what their friends and inspiring creators were liking, buying and selling.
The Depop app launched in the UK in 2013, letting sellers easily list their clothes and accessories with a few pictures and details. The social networking element of the app remained too, with customers visiting to scroll, like and comment on items as well as buy and sell.
By 2017, when Octopus first invested, Depop had more than eight million users. The company raised $20 million, making it one of the most well-funded European fashion startups of the year. Depop used this money to globally grow the app, especially in America.
When Depop raised money again in 2019, Octopus was excited to invest once more. The team impressed investors with revenue growth of 100% year-on-year over the previous few years and raised a further $62 million. Predicting that American users would triple in the coming years, Depop used the money to expand further into the US whilst continuing to develop the technology behind the app.
Empowering the next generation
Part of Depop’s success is down to its popularity among the next generation. The majority of Depop’s active customers are under the age of 26, with a third of all UK 16-24-year-olds registered. This popularity is likely down to the opportunity the app offers to this group.
It’s straightforward for customers to get up and running on Depop, especially for Generation Z (those born between 1997 and 2010) who’ve grown up using technology. Casual sellers can easily make some cash shifting their pre-loved clothes; last year, a Guardian article called Depop the “new paper round,” providing youngsters with pocket money through selling fashion items. But for some ambitious Depop users, the app gives them the chance to start a full-time business.
“You can now start a fashion business from your bedroom,” CEO Maria commented in an interview with TechCrunch. And that’s exactly what many Depop customers are doing. People who are “super creative” and have “great taste” trawl charity shops for items to resell or make pieces themselves. Gradually, they build up a following on Depop and can create a sustainable business.
Maria also explained that Depop is responding to the evolving needs of fashion consumers. Customers are increasingly worried about sustainability and waste, and brands don’t dictate trends anymore. Depop offers an alternative option to big retailers, giving customers the chance to curate their wardrobes sustainably.
Looking to the future
Maria is excited about the coming years of continued growth and is looking forward to supporting Depop’s customers. “We want to power young, entrepreneurial, creative people… because we think they’re the ones that will change the world,” she said, speaking to the Guardian. Depop Founder Simon elaborated, describing how Depop is working to create “a stronger relationship between buyers and sellers.” He continued to add, “We are becoming a key part of the lifestyle of a generation which values community and sustainability, while possessing a strong entrepreneurial streak.”
Backing up Depop’s mission are impressive numbers. Depop has raised more than $100 million in total and is estimated to have handled more than $500 million of sales. Tapping into the needs of the next generation has massively benefited the company.
Octopus are excited to see what the future holds for Depop. Rebecca from the Octopus Ventures team said, “We’re very proud of the work Maria and her team have done. The company has experienced phenomenal growth since we first invested in 2017 and we look forward to seeing what the future holds.”
