New York CNN  — 

Online marketplace Etsy announced Wednesday it is expanding into the booming clothing resale space by acquiring Gen Z-focused reseller Depop for $1.63 billion.

U.K.-based Depop, which launched in 2011, is an ecommerce marketplace for buying and selling vintage and streetwear fashion. About 90% of its active users are under the age of 26, according to a press release announcing the deal.

“Etsy is not always the first port of call for shoppers interested in fashion resale – especially outside of the United States,” Neil Saunders, managing director of market research firm GlobalData, said in a note Wednesday. Acquiring Depop, he said, would boost Etsy’s customer base and allow it to tap into the surging secondhand clothing market.

Etsy, which sells vintage and handmade products, currently only allows its sellers to resell items in its vintage and craft supplies categories.

Etsy said it expects the deal to close at the end of the third quarter 2021. Shares of Etsy (ETSY) were up over 4% on Nasdaq in midday trading Wednesday.

Demand for secondhand clothing has been gaining steam, driven by environmentally-conscious Millennial and Gen Z shoppers.

It is estimated to grow to $64 billion in sales by 2024 from sales of $28 billion in 2020. Big retailers such as Walmart (WMT), Nordstrom (JWN) and Gap (GPS) have gotten into secondhand clothing either on their own or through partnerships with established resellers.

“Over the next ten [years], the [resale market] will become larger still, fueled by an interest in sustainability, a desire for uniqueness, and the rise of the participatory consumer who wants to trade as well as buy,” said Saunders.