JP Morgan Asset Management has confirmed in a press release that it has invested in Lazada, Rocket Internet’s Amazon clone that has about 1,000 employees and operates in 5 countries in Southeast Asia. Sources have told TheNextWeb that the investment is worth “upwards of USD 50M”, possibly even as high as USD100M.
Lazada claims that it is now the fastest growing online department store in the region. It launched in March 2012 to much fanfare in Indonesia, Thailand, and the Philippines. It later opened in Malaysia and Vietnam.
JP Morgan has been investing in a string of e-commerce companies by Rocket Internet lately. It recently pumped an undisclosed amount into German site Zalando and USD 45M in Brazil’s Dafiti. It followed those up with an equity stake in the USD40M-80M range in Russian site Lamoda, and funded Australian site The Iconic for USD 20M.
The investment bank seems bullish about Rocket Internet’s prospects in Asia despite its recent struggles. Earlier this year, it quietly wound up its Birchbox clone in Australia, shut down operations in China, and fired staff in the Philippines and Singapore. It will also leave Turkey, despite having 8 of its portfolio companies operating in the country.
While Rocket Internet has fans in the way it executes its businesses, our commentator Bernard Leong said that its business strategy had one fundamental flaw that accounts partially for its recent troubles.
“(They) fall short in building businesses with real value… you can’t build companies on spreadsheets and exit strategies because everyone is aware of the trick,” he wrote on SGE.
Some bumps are to be expected in Rocket Internet’s Asian invasion. Not even Silicon Valley’s most innovative tech giants have been immune to trouble in the continent. If anything, its consolidation efforts signal a shift in its expansion strategy, and it might just come back stronger.