In a sign that the circular economy is spinning faster than ever, Etsy has purchased the fashion resale app Depop for $1.6 billion.

The transaction will close at the end of 2021, and Depop is set to retain its existing leadership team and headquarters in London.

The two companies said they saw a clear fit between Depop’s online resale model and Etsy, which has been operating one of the largest two-sided marketplaces, and connecting independent creators and craftspeople with online shoppers for more than 15 years.

Depop, which has a large Gen Z audience — over 90 percent of active consumers are Gen Z — said it will aim to leverage Etsy’s technology, marketing and product expertise to “accelerate its mission of building the most progressive home of fashion” at a time when the second-hand market is booming and competition stiffens.

Earlier this year, Vestiaire Collective also received a $216 million investment from Kering and Tiger Global, while Vinted, another second-hand marketplace, received a fresh round of investment that shot up its pre-money valuation to 3.5 billion euros.

“We’re on a journey building Depop into a place where the next generation comes to explore unique fashion and be part of a community that’s changing the way we shop. Our community is made up of people who are creating a new fashion system by establishing new trends and making new from old. They come to Depop for the clothes, but stay for the culture,” said Depop chief executive Maria Raga, adding that the company’s aim is to build on the strength of its existing community by leveraging “the resources of a much larger company.”

According to the company, Depop had a revenue of $70 million last year — a 100 percent year-over-year increase.

Etsy said that the platform’s steady growth and strong brand awareness among Gen Z shoppers made Depop an attractive target.

“We believe Depop is the resale home for Gen Z consumers, with a passionate community, a highly-differentiated offering of unique items, and significant potential to further scale,” said Josh Silverman, Etsy Inc. CEO.

“Depop’s world-class management team and employees have done a fantastic job nurturing this community and driving organic, authentic growth in a way that aligns well with Etsy’s DNA and mission. We see significant opportunities for shared expertise and growth synergies across what will now be a tremendous ‘house of brands’ portfolio.”