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Etsy began in Brooklyn in June 2005 as an online marketplace for handmade goods and craft supplies. It later became a publicly traded company and grew into a global marketplace connecting independent sellers with buyers. In 2025, Etsy reported $10.5 billion in marketplace gross merchandise sales (GMS), alongside 86.5 million active buyers and 5.6 million active sellers. Those figures show its scale, while its marketplace fees and optional seller services explain how the business earns revenue.
How Etsy started in Brooklyn
Etsy’s origin was a small-team effort to create an online venue for handmade goods and craft supplies. Its IPO prospectus describes the company as founded in Brooklyn in June 2005 with that marketplace focus. The company’s official profile also identifies 2005 as its founding year and Brooklyn as its headquarters. Etsy investor profile · 2015 IPO prospectus
A founder retrospective published under the byline “Rokali” recalls: “In early April of 2005, I sat in an orange chair facing an open window.” The author says the initial ideas became a live website in about two months, working with three friends named Chris, Haim, and Jared. The retrospective does not identify Rokali by a fuller name or specify a formal role, so those details should not be inferred. Etsy’s 2008 retrospective
The premise was focused: give makers and people looking for distinctive goods a place to find one another online. Etsy’s current investor profile describes its mission as keeping “human connection at the heart of commerce.” That is the company’s stated mission, rather than an independent assessment of how well it fulfills it. Etsy investor profile
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How Etsy grew beyond its early community
Etsy’s January 2008 retrospective reported that, after 33 months, the company had 50 employees, more than 650,000 community members, and more than 120,000 sellers across 127 countries. These are historical company-reported figures. They should not be directly compared with today’s active-buyer and active-seller counts: the older retrospective uses different terms and does not define those figures in the same way. Etsy’s 2008 retrospective
The marketplace model could expand without Etsy owning the goods listed by sellers. Etsy’s 2025 Form 10-K describes the company as operating an asset-light business that does not hold physical inventory. Independent sellers supply the products; the marketplace connects them with buyers and supports transactions. That structure helped Etsy grow as a venue for many sellers rather than as a conventional retailer purchasing and stocking all the merchandise itself. Etsy 2025 Form 10-K
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When Etsy went public
Etsy filed its final IPO prospectus on April 16, 2015. The offering price was $16 per share, and the prospectus said its common stock had been approved for listing on the Nasdaq Global Select Market under the symbol ETSY. Etsy’s 2025 filing states that its shares have been listed there since April 16, 2015. Going public marked a significant corporate milestone, but it is not by itself an explanation for the marketplace’s growth. 2015 IPO prospectus · Etsy 2025 Form 10-K
How Etsy makes money
Etsy’s 2025 Form 10-K describes revenue from its marketplace and from optional seller services. Marketplace revenue primarily comes from transaction fees, including Offsite Ads fees, payment-processing fees, and listing fees. Optional seller services primarily include on-site advertising and shipping labels. These are the company’s disclosures about its business model. Etsy 2025 Form 10-K
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The filing describes a 6.5% transaction fee on completed transactions for Etsy marketplace sellers. It also describes Offsite Ads fees of 12% or 15% on qualifying sales, depending on a seller’s sales volume. Payment-processing rates vary by seller country and other factors. Those rates reflect the schedule described in the 2025 filing, not a guarantee of current terms; sellers should check Etsy’s live seller terms before relying on a fee amount.
Etsy’s reported scale in 2025
Etsy reported $10.5 billion in Etsy marketplace GMS for 2025. GMS is a measure of the value of merchandise sold through the marketplace; it is not the same as revenue recognized by Etsy. The company separately reported $2,883.5 million in total company revenue for 2025. The two figures measure different things and should not be conflated. Etsy investor profile · Etsy 2025 Form 10-K
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| Measure | Etsy-reported figure | Scope and definition |
|---|---|---|
| Marketplace GMS | $10.5 billion in 2025 | Etsy marketplace merchandise sales; not recognized revenue. |
| Active buyers | 86.5 million as of December 31, 2025 | People who made at least one purchase in the preceding 12 months. |
| Active sellers | 5.6 million as of December 31, 2025 | Sellers with a charge or sale in the preceding 12 months. |
| Total company revenue | $2,883.5 million in 2025 | Revenue for the company, not Etsy marketplace GMS. |
These figures are reported by Etsy in its investor profile and 2025 Form 10-K. The active counts use rolling 12-month definitions, while the 2008 retrospective’s community and seller totals were reported in different terms. Etsy investor profile · Etsy 2025 Form 10-K
The marketplace’s geographic mix remains weighted toward the United States. Etsy reported that U.S. buyers generated 74% of Etsy marketplace GMS in 2025, with buyers outside the United States accounting for 26%. Etsy also reported that GMS declined 4% in 2025. The annual report characterized this as a meaningful improvement from the decline in 2024, while noting performance continued to trail overall e-commerce growth. Etsy 2025 Form 10-K
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What buyers find on Etsy—and the market it targets
Etsy’s six highest GMS-generating categories in its 2025 filing were home and living; jewelry and personal accessories; apparel; craft supplies; paper and party supplies; and toys and games. This mix reflects the marketplace’s breadth while remaining rooted in distinctive goods and supplies rather than one narrow product category. Etsy 2025 Form 10-K
Etsy cited its own estimates of a roughly $600 billion online market opportunity across relevant retail categories in its core geographies, rising to approximately $2 trillion when offline sales are included. It estimated global e-commerce revenue in its core geographies would grow at a 7% compound annual rate through 2029. These are estimates cited by Etsy, not independent market measurements or guarantees. Etsy also calculated that its marketplace GMS represented approximately 2% of its estimated online opportunity across the listed categories in 2025. Etsy 2025 Form 10-K
Etsy’s portfolio has changed
Etsy’s marketplace is the central focus of this story, but the company has also owned other platforms. Its 2025 Form 10-K says it sold Elo7, a Brazil-based marketplace for handmade and unique items, in August 2023, and completed the sale of Reverb, a musical-instrument marketplace, on June 2, 2025. Etsy 2025 Form 10-K
The same filing says Etsy and eBay signed a purchase agreement on February 15, 2026, for eBay to acquire Depop for $1.2 billion in cash, subject to adjustments and closing conditions. At the time of that filing, Etsy expected the sale to close in the second quarter of 2026. The filing does not establish whether the transaction subsequently closed, so it does not support a definitive statement about Depop’s current ownership.
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