Global Fashion Group (GFG), the parent of fashion e-tailer Jabong, has raised an extra €30 million from Rocket Internet. This is an addition to the €300 million round of funding GFG raised from the German Internet company in May.
Rocket Internet’s direct and indirect stake after the transaction will be 20.4%.
However, Rocket Internet said the GFG is now valued at €1 billion, a 68% mark down from its earlier valuation of €3.1 billion in July 2015. At the time, GFG raised €150 million (~$166 million) in a round of funding from Rocket Internet and AB Kinnevik. With the investment, Kinnevik would own at least 25.0%.
TechCrunch reports that GFG CEO Romain Voog met with more than 90 investors from across the world but was not able to drum up interest in the company.
The Global Fashion Group operates in 28 countries under different businesses and employs 9,500 people. In September 2014, Rocket Internet had merged Jabong with four other online fashion retailers in Latin America, Russia, Middle East, South-East Asia and Australia to create Global Fashion Group.
Earlier in the month, it was reported that Snapdeal and Aditya Birla Group-backed abof.com are front runners to buy Jabong in India. Jabong’s major investors AB Kinnevik and Rocket Internet were in talks with players since September 2015 to sell the company. AB Kinnevik was spearheading the sale process and had reached out to other buyers such as Paytm as well.
In November 2014, it was reported that Amazon was in talks to buy Jabong. At the time the deal was pegged at around $1.2 billion. However, the deal did no go through in January following disagreements between the companies over valuation, according to a VCCircle report.
This time however, Jabong’s prospects seem better as the company is returning to profitability after trimming its discounts and posted a gross profit of Rs 1.49 crore for the quarter ended March 2016 (Q1 2016). It had posted a loss of Rs 11.21 crore in the same period last year.
Jabong’s revenues stood at Rs 243.78 crore in the first quarter of 2016, up 14% year-on-year (YoY) from Rs 213.87 crore in the corresponding quarter last year. Revenues increased 11.55% quarter-on-quarter (QoQ) from Rs 218.53 crore in Q4 2015. Gross Merchandise Value (GMV) stood at Rs 410.54 crore for Q1 2016, up 8.4% YoY from Rs 378.38 crore in Q1 2015, and up 8.7% QoQ from Rs 377.73 crore in Q4 2015.