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Global Fashion Group secures EUR 150 million from Rocket and Kinnevik

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Global Fashion Group, the owner of online fashion and apparel retailer Jabong, has raised euro 150 million (~$166 million) in a round of funding from existing investors Rocket Internet and AB Kinnevik. With this investment, Kinnevik will own at least 25.0% and Rocket at least 21.9% of GFG.The fashion platform will use the funds for logistics, marketing and product development. It also acquired two Brazilian online fashion businesses, Tricae and Kanui, is a share for share transaction.

Note that Indian e-commerce company Jabong was merged into the roll-up of emerging markets focused fashion e-commerce brands called Global Fashion Group (GFG) by Rocket Internet and its investor Kinnevik in September last year. Other companies merged into this entity include Dafiti (Latin America), Lamoda (Russia & CIS), Namshi (Middle East) and Zalora (South East Asia & Australia), which along with Jabong, would cover 23 countries. GF Group, which includes Rocket Internet and its investors Kinnevik, Access Industries and other shareholders own 94.85% stake in Jabong.

The merged companies had mentioned then that the GFG roll-up would provide greater leverage in terms of economies of scale while sourcing from International brands and marketing with global media channels. In addition, they would be able to leverage competencies across companies to strengthen private label efforts (“Lara Karen” and “Sangria” by Jabong in India and “ZALORA” and “Ezra” by Zalora), share knowledge of building infrastructure for last mile delivery networks (e.g. LaModa Express in Russia, Jabong in India), and deliver a mobile application experience.

Jabong financials: Jabong reported net revenues of Rs 216 crore for the three month period ended September 31st 2014, up almost two and a half times (146%) from the Rs 87.8 crore reported for the same period in 2013. This was helped by a 177% increase in Gross Merchandise Value (GMV) increase for the company, up to Rs 345.8 crore, up from 124.8 crore for Q3-2013. The company had previously reported net revenues of Rs 438.57 crore for the full year ended 31st March 2014, averaging around Rs 109 crore a quarter, and a GMV of Rs 511.37 crore, averaging around Rs 128 crore per quarter.

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