North American firms have spent USD 1.66bn year-to-date on acquiring online marketplaces that peddle new or used fashions – more than the peak years of 2014 (USD 779m) and 2016 (USD 709m) combined.

Crafts marketplace Etsy [NASDAQ:ETSY] dominated with its USD 1.625bn acquisition of UK-based used-clothing marketplace Depop in June. Then in July, online consignment store ThredUp [NASDAQ:TDUP] paid USD 28.5m for Remix Global, Europe’s leading secondhand apparel reseller.

The two transactions show that scoring deals for designer duds is becoming the height of fashion.

While online thrifting is not new – eBay [NASDAQ:EBAY] pioneered the category more than two decades ago – its current dominance comes to a confluence of two factors.

First, environmentally conscious Gen Zers and Millennials hate the idea of clothing waste clogging up landfills. Then the pandemic drove cash-strapped consumers to shop for bargains as well as sell used clothes for extra income. Among 18-to-24-year-olds, 46% sold pre-owned goods for financial benefit last year, according to eBay’s “Recommerce Report” released in March.

Besides eBay, Etsy and ThredUp, other players in secondhand fashion include Poshmark [NASDAQ:POSH], The RealReal [NASDAQ:REAL] and ReBag.com.

Mainstream fashion brands are not sitting on the sidelines either. Levi’s [NYSE:LEVI], Madewell and high-end athleisurewear maker Lululemon [NASDAQ:LULU] all have joined the movement with their own resale programs.

These big-name fashion brands have no interest in cleaning, processing and photographing their used clothes, so they rely on Trove to do all the backend work. Trove last month raised USD 77.5m in Series D funding led by G2 Venture Partners, illustrating hot demand for used clothing from venture capitalists too.

Other specialists in the logistics and infrastructure of used fashion – sometimes called ‘circular shopping’ or recommerce – are looking to raise venture funding too. They include textile recycling startup ReCircled and Marque Luxury, a B2B supplier of used luxury fashion accessories.

What trend next?

Going public is a likely exit for these startups, given most mainstream fashion brands prefer to outsource their resale programs and are therefore unlikely acquirors.

Poshmark went public in February, ThredUp joined in March, and New York-based Rent the Runway, a rental service for designer dresses, filed paperwork to go public in July. Neiman Marcus-backed startup Fashionphile has talked about an IPO exit too.

But buyers for them exist. Used clothing marketplaces like eBay, ThredUp, Poshmark and Etsy have all expressed the possibility of more acquisitions in filings.

Fashion trends move in cycles. Thrifting is back in vogue.