Zalora and Jabong get boost as Rocket Internet’s fashion startup group nabs $339m funding

Rocket Internet’s Zalora operates across Southeast Asia while Jabong focuses on India. Photo credit: Pexels.

The Global Fashion Group (GFG), managed by German startup machine Rocket Internet, announced today that it has raised US$339 million in a fresh round of funding which values the group of ecommerce sites at US$1.1 billion.

GFG is made up of six stores selling clothing and accessories: Jabong in India, Zalora in Southeast Asia, Namshi in the Middle East, The Iconic in Australia and New Zealand, Dafiti in Latin America, and Lamoda in Russia and Eastern Europe. Rocket Internet has committed to underwrite at least US$113 million of the investment, with the rest coming from existing shareholders.

Rocket Internet’s latest annual report suggested both Zalora and Jabong were running out of money. Zalora’s losses from 2013 to 2015 amounted to US$259 million, suggesting that it may have burned through the entirety of its cash reserves.

This fresh cash injection will surely breathe new life into the struggling companies and help them fend off competition from the likes of Myntra in India and Reebonz in Southeast Asia.

Selling up

Rumors of Zalora exiting Thailand and Vietnam have popped up recently. Rocket and GFG declined to comment at that time.

A spokesperson at Rocket Internet in Berlin this afternoon confirmed to Tech in Asia that Zalora is in fact selling its businesses in Thailand and Vietnam. The representative declined to give any information on the potential buyers.

“This decision is part of GFG’s overall strategy to keep the organization to focus investment on high potential, high growth, profitable geographies where it can build a leader of online fashion,” the spokesperson explained.

“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,” said Oliver Samwer, CEO of Rocket Internet, today in an emailed statement.

Chinese ecommerce giant Alibaba this month acquired a majority stake in Rocket Internet’s Amazon-esque Lazada for US$1 billion.

Converted from Euro. EUR 1= US$1.13