<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0306</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2015-04-21</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001370637</issuerCik>
        <issuerName>ETSY INC</issuerName>
        <issuerTradingSymbol>ETSY</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001466950</rptOwnerCik>
            <rptOwnerName>Index Ventures Growth I (Jersey) L.P.</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>NO.1 SEATON PLACE, ST. HELIER</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>JERSEY (CHANNEL ISLANDS)</rptOwnerCity>
            <rptOwnerState>X0</rptOwnerState>
            <rptOwnerZipCode>JE4 8YJ</rptOwnerZipCode>
            <rptOwnerStateDescription>UNITED KINGDOM</rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle></officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001447961</rptOwnerCik>
            <rptOwnerName>Index Venture Growth Associates I Ltd</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>N 1 SEATON PLACE</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>ST HELIER,JERSEY, CHANNEL ISL.</rptOwnerCity>
            <rptOwnerState>X0</rptOwnerState>
            <rptOwnerZipCode>JE4 8YJ</rptOwnerZipCode>
            <rptOwnerStateDescription>UNITED KINGDOM</rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle></officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001466948</rptOwnerCik>
            <rptOwnerName>Index Ventures Growth I Parallel Entrepreneur Fund (Jersey) L.P.</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>NO.1 SEATON PLACE, ST. HELIER</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>JERSEY (CHANNEL ISLANDS)</rptOwnerCity>
            <rptOwnerState>X0</rptOwnerState>
            <rptOwnerZipCode>JE4 8YJ</rptOwnerZipCode>
            <rptOwnerStateDescription>UNITED KINGDOM</rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle></officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001591294</rptOwnerCik>
            <rptOwnerName>Yucca (Jersey) SLP</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>44 THE ESPLANADE</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>ST. HELIER</rptOwnerCity>
            <rptOwnerState>Y9</rptOwnerState>
            <rptOwnerZipCode>JE4 9WG</rptOwnerZipCode>
            <rptOwnerStateDescription>JERSEY</rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>1</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle></officerTitle>
            <otherText></otherText>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2015-04-21</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>S</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>1218667</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>14.96</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>2795583</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F1"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2015-04-21</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
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                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
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                </transactionShares>
                <transactionPricePerShare>
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                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
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                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>97559</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
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                    <footnoteId id="F2"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
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            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
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                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
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                </transactionShares>
                <transactionPricePerShare>
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                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
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                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>14556</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F3"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2015-04-21</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>C</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>8081114</value>
                </transactionShares>
                <transactionPricePerShare>
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                    <footnoteId id="F5"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>10876697</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                    <footnoteId id="F1"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2015-04-21</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
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                <transactionCode>C</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>281937</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F4"/>
                    <footnoteId id="F5"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>379496</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
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            </ownershipNature>
        </nonDerivativeTransaction>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2015-04-21</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
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                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
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                <transactionPricePerShare>
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            <postTransactionAmounts>
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                </sharesOwnedFollowingTransaction>
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            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Series A Preferred Stock</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <footnoteId id="F4"/>
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            <transactionDate>
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            <transactionAmounts>
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                </transactionShares>
                <transactionPricePerShare>
                    <value>0.00</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
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                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
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            </exerciseDate>
            <expirationDate>
                <footnoteId id="F4"/>
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            <underlyingSecurity>
                <underlyingSecurityTitle>
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                </underlyingSecurityTitle>
                <underlyingSecurityShares>
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                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
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                    <footnoteId id="F1"/>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Series A Preferred Stock</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <footnoteId id="F4"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2015-04-21</value>
            </transactionDate>
            <deemedExecutionDate></deemedExecutionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>C</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
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                </transactionShares>
                <transactionPricePerShare>
                    <value>0.00</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
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            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F4"/>
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            <expirationDate>
                <footnoteId id="F4"/>
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            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
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                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
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                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
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            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
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                <transactionPricePerShare>
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                <transactionAcquiredDisposedCode>
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        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
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            <transactionDate>
                <value>2015-04-21</value>
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                <transactionPricePerShare>
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        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
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    <footnotes>
        <footnote id="F1">The shares are held by Index Ventures Growth I (Jersey). L.P. Index Venture Growth Associates I Limited is the managing general partner of Index Ventures Growth I (Jersey), L.P. Nigel T. Greenwood, David Hall, Ian J. Henderson, Phil Balderson, Bernard Dalle and Sinead Meehan are directors of Index Venture Growth Associates I Limited. Mrs. Meehan and Messrs. Greenwood, Hall, Henderson, Balderson and Dalle share voting and dispositive power with respect to the shares. Each of these persons disclaims beneficial ownership of the shares except to the extent of his or her pecuniary interest therein.</footnote>
        <footnote id="F2">The shares are held by Index Ventures Growth I Parallel Entrepreneur Fund (Jersey). L.P. Index Venture Growth Associates I Limited is the managing general partner of Index Ventures Growth I Parallel Entrepreneur Fund (Jersey), L.P.  Nigel T. Greenwood, David Hall, Ian J. Henderson, Phil Balderson, Bernard Dalle and Sinead Meehan are directors of Index Venture Growth Associates I Limited. Mrs. Meehan and Messrs. Greenwood, Hall, Henderson, Balderson and Dalle share voting and dispositive power with respect to the shares. Each of these persons disclaims beneficial ownership of the shares except to the extent of his or her pecuniary interest therein.</footnote>
        <footnote id="F3">The shares are held by Yucca (Jersey), SLP. The above shares represent securities held in a coinvestment fund that is contractually required to mirror Index Venture Growth Associates I Limited's investment. As a result, Mrs. Meehan and Messrs. Greenwood, Hall, Henderson, Balderson and Dalle may be deemed to have voting and dispositive power over Yucca (Jersey), SLP's shares by virtue of its shared dispositive power over and shared voting power over the shares held by Index Venture Growth Associates I Limited. Each of these persons disclaims beneficial ownership of the securities except to the extent of his or her pecuniary interest therein.</footnote>
        <footnote id="F4">In connection with the completion of the Issuer's initial public offering of Common Stock, each share of Series A Preferred Stock, Series A-1 Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, and Series E Preferred Stock automatically converted into five shares of common stock of the Issuer and has no expiration date or conversion price.</footnote>
        <footnote id="F5">In connection with the completion of the Issuer's initial public offering of Common Stock, each share of Series F Preferred Stock automatically converted into 0.5 shares of common stock of the Issuer and has no expiration date or conversion price.</footnote>
    </footnotes>

    <remarks></remarks>

    <ownerSignature>
        <signatureName>INDEX VENTURES GROWTH I (JERSEY), L.P. by its Managing General Partner: Index Venture Growth Associates I Limited /s/ Nigel Greenwood, Director</signatureName>
        <signatureDate>2015-04-22</signatureDate>
    </ownerSignature>

    <ownerSignature>
        <signatureName>INDEX VENTURES GROWTH I PARALLEL ENTREPRENEUR FUND (JERSEY) L.P. by its Managing General Partner: Index Venture Growth Associates I Limited /s/ Nigel Greenwood, Director</signatureName>
        <signatureDate>2015-04-22</signatureDate>
    </ownerSignature>

    <ownerSignature>
        <signatureName>INDEX VENTURE GROWTH ASSOCIATES I LIMITED /s/ Nigel Greenwood, Director</signatureName>
        <signatureDate>2015-04-22</signatureDate>
    </ownerSignature>

    <ownerSignature>
        <signatureName>Elian Employee Benefit Services Limited as Authorized Signatory of YUCCA (JERSEY) SLP in its capacity of Administrator of the Index Co-Investment Scheme  /s/ Giles Johnstone Scott, Authorized Signatory</signatureName>
        <signatureDate>2015-04-22</signatureDate>
    </ownerSignature>

    <ownerSignature>
        <signatureName>Elian Employee Benefit Services Limited as Authorized Signatory of YUCCA (JERSEY) SLP in its capacity of Administrator of the Index Co-Investment Scheme  /s/ Alex Di Santo, Authorized Signatory</signatureName>
        <signatureDate>2015-04-22</signatureDate>
    </ownerSignature>
</ownershipDocument>
