If you’re over 26, there’s a chance you’ve never heard of Depop. If you’re 26 or under, there’s a good chance that not only have you heard of Depop, but that you’re an active user, part of the community that makes it Gen Z’s favorite shopping app.
Founded in 2011 by Simon Beckerman, the same Simon Beckerman behind Italian eyewear brand RETROSUPERFUTURE, Depop has exploded in popularity in the last few years, occupying that coveted sweet spot between marketplace and social media platform. The app currently has more than 21 million global users and 90% of its active users are Gen Z. More than 25 million items are available on the app at any given time and its biggest sellers earn over $100,000 a year.
As the corona-conomy forces fashion brands to reevaluate how they reach younger consumers, Depop has emerged as among the strongest platforms, enabling brands to reach customers and sell to them right on the app they’re already on.
But how did Depop become to sustainability minded Gen Z what the mall was to disaffected ‘90s youth? To understand the story of Depop’s ascendance, you have to understand the story of Maria Raga, Depop’s CEO, and how she led a rapidly growing international team through the company’s evolution from startup to generational powerhouse.
Like many out of business school (Universitat de València with stints at Cornell, INSEAD, and Harvard), Raga cut her teeth as a consultant at Bain & Company, soaking up knowledge and learning about the challenges facing businesses across industries. As the aughts were coming to a close, Raga was eager to get her hands dirty and had her eye on the digital world as it was starting to play a bigger and bigger role in global commerce.
She joined Privalia, essentially a Spanish version of flash-sale superstar Gilt, as the company’s head of business development. “I loved it. It was my first experience on the other side of the fence: digital, ecommerce, and fashion,” explains Raga. The company was eventually bought by Vente Privee (now Veepee) but the experience provided her with the foundation she’d build upon at the next step in her career path.
“I loved the adrenaline of pushing for the business, of seeing the business grow, and all the challenges that come with it.”
Raga joined MyCityDeal, a Groupon-like copycat founded by the Samwer brothers, in 2010 as a founding member. It was a natural step in her career, reflecting her desire to have an impact on the business world on the field instead of on the sidelines. Over the course of four years, the experience foreshadowed her future role leading a company through quick and tremendous growth. “I loved the adrenaline of pushing for the business, of seeing the business grow, and all the challenges that come with it. It’s a fighter kind of attitude you need when you’re in this role.” Within two years the business was sold to Groupon and two years after that Groupon went public.
By then, Raga was developing a familiar itch, sizing up the market to wrap her head around what the next tectonic shift in commerce would be, soon understanding mobile was the future of just about everything.
A minor player compared to giants leading the shift towards mobile like Google, Depop caught Raga’s eye because of the innovative ways they were connecting with their audience through social media. “I remember they engaged with Chiara Ferragni, one of Instagram’s earliest influencers.” With that signal alone, it was obvious to Raga that Depop was at the top of the mobile wave. She soon dove headfirst into the role as acting COO/CFO in 2014 when the company was just 30 people.
From Acting COO/CFO to CEO
Raga was put in charge of everything from customer support and moderating the platform to “every other thing that nobody wants to take care of.” One of those things was the minor issue of finance. At the time, Depop had one external accountant so it fell to Raga to build an in-house team and set up all the structures needed.
As things go at fledgling companies, Raga was soon swept up in critical decision-making, her background now indispensable. “I started to be involved with investor discussions, building out the models. The role became quite strategic in a way, while operations were very much hands on.”
Two years into her tenure at Depop and the company was looking for a change in leadership. The brand’s founder, Beckerman, had stepped down as CEO in 2013, occupying a seat on the company’s board since then. In between Series A and Series B, a decision couldn’t come soon enough. With her previous career experience and her familiarity with just about everything at Depop, Raga was the clear choice.
Raga officially took over as CEO in April 2016. In the two years since she’d joined the company, it had doubled in size from 30 employees to 60 and with so many things needing attention, she took it one step at a time. “First I focused on the finance side of things because I’m like, ‘I could have an amazing plan but there’s no money. What am I going to do now?’”
Raga started conversations in anticipation of Series B, meeting with investors to explain to them the importance of building an authentic community, shifting the conversation away from the paid vs non-paid growth investors were used to analyzing at that stage. Raga closed the round with $20 million, just a year into her role as CEO. (Depop would go on to raise $62 million in Series C from General Atlantic, with additional funding from previous investors HV Holtzbrinck Ventures, Balderton Capital, Creandum, Octopus Ventures, TempoCap and Klarna CEO and Co-Founder, Sebastian Siemiatkowski.)
Afterwards, Raga looked into her toolbox and tackled everything from lingering operational challenges to building out the management team. At the same time, Raga convinced the company’s founder, Beckerman, to return, a decision whose impact is impossible to overstate.
Rebuilding the Brand
The two worked together to redefine what the Depop brand was all about, an undertaking easier said than done. “I wanted to absorb from him the reasoning behind building the business and look at the current community to understand, ‘what are we here for and what’s most important?’” The two put their heads together to answer questions like, “if Depop were a car, what car would it be?” and “if Depop were a magazine, which magazine would it be?”
They generally saw eye to eye on everything brand-related. The actual community, on the other hand, had a completely different understanding of what Depop was all about. “The users’ answers were super, super different, so we said, ‘Okay, we really need to go back to basics and understand the audience.’”
On a strategic level, that meant redefining the value-proposition of Depop and then working around that.
“We really need to go back to basics and understand the audience.”
Ultimately that exercise led to a complete rebranding and the crafting of a mission statement focused on empowering the next generation to transform fashion. With an overwhelming majority of users under 26, that meant constantly reinforcing a message of sustainability, entrepreneurship, and community. “Our brand strategy was all around that thinking so it helped us become super-focused in terms of how we wanted to build the brand.”
While Raga admits the rebranding project can’t be measured in the same way something like performance marketing can, she’s confident it’s had subtle long-term effects and played an outsized role in helping Depop organically develop a devoted community, a community that now dictates trends across culture and the fashion industry.
Depop’s ability to set trends—or rather the Depop community’s ability to set trends—is among the chief reasons it’s become such a cultural phenomenon. “We don’t dictate. We let the community dictate. We just create a platform that allows them to create those trends or exacerbate them so they grow them.” Another challenge easier said than done given Raga, at 41, is not exactly the target audience.
“We don’t dictate. We let the community dictate.”
To accomplish this, she relies heavily on a young leadership team, many of whom got their start as Depop sellers. “My marketing team is connected with youth culture and speaks the same language. It’s part of the community.” That of course comes with its own challenges, namely placing young professionals in roles that often demand years of experience to properly navigate. A challenge within a challenge, Raga solved this by building structures around them, reasoning that leadership doesn’t always come with age.
A Circular Community
All of these decisions and structural implementations make up the engine driving Depop today. It’s the groundwork behind nearly everything Depop engages in. Its popular events (held pre-lockdown), for instance, bring together buyers and sellers in the community, giving them the chance to learn from one another, showcase best practices, and discuss ongoing challenges. In fact, the lockdown hasn’t stopped Depop from activating its community, bringing these events online through Zoom sessions.
Its physical stores in London, New York, and Los Angeles are the physical manifestation of everything Depop stands for, building on everything Raga has overseen since she stepped in as CEO in 2016. They bring people directly into the Depop world, letting them experience what sustainability, entrepreneurship, and community looks like in real life.
Although the stores are now at the mercy of local regulation as the lockdown continues in one form or another around the world, the value at the heart of Depop has only become clearer in the last six months. Fashion brands have been taking to resale platforms to compensate for the current lack of physical sales channels and to minimize losses on excess inventory, giving them the opportunity to have a voice in the sustainability conversation at the same time.
Beyond the additional revenue channels Depop enables, brands have flocked to Depop because it gives sellers far more control of the experience compared to other popular fashion marketplaces. A testament to the unique culture Depop’s community has carved out for itself, labels that have set up shop on Depop, including Anna Sui, Rodarte, and Christopher Raeburn, have had to study the language of the audience and understand what kind of products users are looking for when they open the app. Those brands soon discovered that Depop buyers were after sample, archive, and deadstock pieces, a nod to the community’s emphasis on sustainability.
The upward trajectory of Depop is not an overnight success story. Rather, it’s the culmination of making the right decisions year after year from the top down, hammering away at the brand’s mission and how that mission manifests itself in everything it touches.
According to a report by McKinsey written in partnership with the Business of Fashion, Gen Z accounts for approximately $150 billion in spending power and will account for 40 percent of global consumers by the end of this year. Additionally, the report finds nine in 10 Gen Z consumers believe companies have a responsibility to address environmental and social issues.
“In the past, brands needed to be involved, they needed to be the one to create the product. Now communities drive businesses. They drive the trends.”
The study relates a number of other revealing insights but to Depop it all amounts to the same thing: that companies need to listen to users, not the other way around. “In the past, brands needed to be involved, they needed to be the one to create the product. Now communities drive businesses. They drive the trends.”
With over 200 employees and offices in London, Manchester, New York, Los Angeles, and Australia, it’s exactly what Raga’s been building all along: a community by the users, for the users.