Global Fashion Group (GFG), parent company of online fashion portal Jabong, has secured a funding of EUR 300 million (about Rs. 2,282 crores) from Rocket Internet. While the German tech startup investor Rocket Internet will underwrite around EUR 100 million (about Rs 760.7 crores) of the financing, it will invest around EUR 85 million (about Rs 646.7 crores), including the conversion of an existing investment at the terms of the financing. Also Read - Flipkart shuts down Jabong, redirects users to Myntra website
The transaction values GFG at EUR 1 billion post the transactions, Rocket Internet said in a statement. “The financing will provide GFG with the necessary capital to continue to execute its strategy of building out its leading position in the online fashion sector in emerging markets,” GFG Chief Executive Officer Romain Voog said. Also Read - Xiaomi has just appointed ex-Jabong Muralikrishnan B as its India COO
During the first quarter of 2016, GFG reduced loss from operations meaningfully compared to the year-ago period, resulting in an improvement of the adjusted EBITDA margin by over 10 percentage points.
“This is in line with GFG’s plan to deliver an accelerated path to profitability across its regional businesses while continuing to capture the significant market opportunity available,” he said.
Founded in 2014, GFG combines six regional brands – Dafiti in Latin America, Lamoda in Russia and CIS, Namshi in the Middle East, The Iconic in Australia, Jabong in India and Zalora in South-East Asia.
“We continue to be very excited about the prospects of GFG, which has successfully built out leading market positions in key emerging markets. We are looking forward to continuing to work with the GFG team as well as Kinnevik and the other GFG shareholders to support GFG,” Rocket Internet CEO Oliver Samwer said.
Rocket Internet also has investment in FoodPanda in India. Jabong MD and CEO Sanjeev Mohanty said the funding will help the firm enhance business operations.
“We have had success over the past few months, with Jabong recently recording its best month in terms of revenue… GFG sees good progress with Jabong in India and this trust will help us strengthen our operations in the country,” he added.
Jabong narrowed down its gross loss to Rs 46.7 crores for 2015 on the back of lower level of discounts from Rs. 159.5 crores in 2014. In India, fashion is one of the largest and fiercely contested categories in e-commerce space. Launched in 2011, Jabong offers more than four lakh products. It was merged with GFG in 2014.