Zalora reveals massive USD 100M round in vote of confidence for fashion e-commerce in Asia

There are funding rounds, and then there are funding rounds. Zalora, a Rocket Internet fashion e-commerce venture, has today revealed that it has raised a massive USD 100M in venture capital from Summit Partners, Investment AB Kinnevik, Verlinvest, and Tengelmann Group.

Most of the investors are Rocket Internet regulars: Summit, Kinnevik, and Tengelmann have bankrolled Lazada before, while the latter has funded Zalora once. Verlinvest, a new — or previously low-key — participant, is a Belgian investment holding company.

The repeat investments portends well for Zalora’s prospects in Asia, a challenging market with relatively low basket sizes, tough infrastructural challenges, and market fragmention.

It shows that investors are confident that the business, despite enduring a loss of EUR 70M (USD 90M) in 2012, down-scaling in Taiwan, and a number of high-profile staff departures, will be able to weather the storm and emerge as the dominant fashion e-commerce player outside of China and India.

The negative cash position should be viewed in the right context of a young business expanding aggressively, not a mature enterprise struggling in a sunset industry.

Image: io9

While the two Asian giants, which altogether have a population of 2.5B, have been hogging the headlines, the rest of Asia Pacific cannot ignored. The eight markets that Zalora occupies are no minnows, having a combined population of over 500M, giving the business plenty of potential to grow.

Zalora’s expanded spending aren’t just in marketing. In Singapore, it recently started a pilot project with 7-Eleven to allow shoppers to pay and pick up their goods at 19 convenience store outlet on the island. It also launched a print and mobile magazine documenting the latest fashion trends.

With an app development center, the island state is also the focal point of most of Zalora’s product development activities.

Overall, Rocket Internet’s enterprises appear to be shaping up nicely in Asia Pacific. While there are obvious flukes (Home24 being an example), companies like Foodpanda are also blazing a trial to become a leading online food delivery service in the region, receiving USD 26M in investments and absorbing competitor Singapore-Dine into its fold.