Dealflow | July 16, 2018

Online artisan marketplace DaWanda shuts down

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, July 10 – DaWanda, a German Etsy competitor, launched in 2006 as an online market for artists and craftsmen to sell their work. The company decided with its investors to shut its doors and support sellers in migrating to Etsy.

Etsy, which is a public company, will not be acquiring any other parts of the company.

  • The best of times… Dawanda launched positioning itself as an “alternative to industrially-produced bulk goods and is a port of call for people who appreciate the uniqueness of handmade items”—similarly to Etsy. In 2015, Investors, including U.S.-based Insight Venture Partners and Russia’s Leonid Boguslavsky, backed the company in what was reportedly (translated) a €25 million investment round.
  • Community market that couldn’t compete… Dawanda’s base of craftsmen sellers began to fall shortly after its 2015 funding round, amid both the rise of Etsy, where many of its craftsmen also listed, and a growing number of do-it-yourself e-commerce platforms.  Dawanda’s sellers publicly complained of rising fees and inconsistent cross-border transaction terms. By last year, it’s seller base had fallen to 70,000, down from 380,000 in 2015.
  • Divergent growth strategies… By contrast, Etsy has continued to grow—its has almost two million registered sellers—and continues to expand geographically. Much of its seller growth appears to come from mainstream manufactured product seller, rather than craftsmen and artisans. Original sellers have noticed:  “I do not think Etsy is an independent marketplace, but you can still find independent artists—you just have to dig deeper,” one of Etsy’s early sellers told Racked. Others have reported being drowned out by “volume” producers.
  • Diversifying revenue sources… Etsy still claims to be a champion of its original mission of supporting craftsmen in launching and selling their goods. Etsy makes almost half of its revenue selling services to help sellers launch businesses. Sellers have complained about limitations that come with listing on Etsy, however.