How Etsy Has Sustained Growth With a Clever M&A Strategy
The e-commerce platform’s acquisition of Depop is only the latest move in its ambitious expansion plans
When businesses decide how to allocate their capital, they essentially have four options: reinvest, return capital to shareholders through dividends or repurchases, take on mergers and acquisitions, or build the balance sheet. Historically, tech companies have favored reinvesting: hiring more engineers, entering new markets, and building new products. But as tech profits and cash flow has grown, companies are increasingly turning to M&A and capital returns. One tech company that has fueled its expansion through M&A in the last few years is the e-commerce marketplace Etsy, that was founded in 2005 and went public in 2015.
Building a House of Brands
When Josh Silverman and Rachel Glaser joined Etsy as CEO and CFO in the second quarter of 2017, they inherited a business with slowing gross merchandise value (GMV) growth and ballooning expenses. After a year of reducing costs, rejiggering priorities, and jumpstarting growth, Etsy was on solid enough footing to look for external opportunities. In June 2018, it acquired DaWanda, a German marketplace for gifts and homemade goods. Its corporate development team has been…
