After huge financial losses, online fashion retailer Jabong is looking for a buyout. The parent company Global Fashion Group is in initial talks with m-commerce company Paytm for a potential takeover. Also Read - Book train tickets, check PNR status via Paytm app: 10 simple stepsAlso Read - Book LPG cylinder via Paytm and get discount up to Rs 2,700: How to grab the deal
Livemint cites sources familiar with the matter claiming that Jabong’s unhealthy financial metrics is the core reason for this decision. Vijay Shekhar Sharma’s company is in the very early stages of discussion, and if this deal goes through, this could be the second largest acquisition since Flipkart took over Myntra last year. Also Read - Best online gaming platforms to play multiple games: Paytm First Games, PlayerzPot and more
The rumored valuation of Jabong is pegged to be somewhere between $500 million and $800 million. Investment manager at AB Kinnevik, Akhil Chainwala, is leading these discussions with Sharma. Chainwala is also set to meet executives of the Aditya Birla Group and pitch the sell.
Myntra’s rise and growing competition in the online fashion industry made it difficult for Jabong to cope up. Amazon was also reportedly in line to buy Jabong last year, but pulled out in early 2015 when Jabong asked for $1.2 billion in valuation.
The company was launched in 2012, and is headquartered in Gurgaon. The report states that Jabong had sales of Rs 811.4 crore and a loss of Rs 454 crore for the 2014 year ended December 31. The company even shut its offices in London and moved to India to cut losses even further.