Global Fashion Group that includes Jabong raises $25 million

The funds are in addition to the $339 million received from investors at a sharply lower valuation in April


Global Fashion Group houses the German e-commerce company’s fashion businesses from emerging countries.
Global Fashion Group houses the German e-commerce company’s fashion businesses from emerging countries.

New Delhi: Global Fashion Group (GFG), an international group of six online fashion stores including India’s Jabong, has raised $25 million more on top of the $339 million it received from investors at a sharply lower valuation in April.

The direct and indirect share of Germany-based investor Rocket Internet after the transaction is 20.4%.

In April, GFG raised $339 million from its controlling shareholders, Rocket Internet and AB Kinnevik, in a deal that valued it at $1.1 billion, a 68% drop from July 2015, when it raised $169 million at a valuation of $3.5 billion.

The direct and indirect share of Rocket Internet after the transaction is 20.4%, it said in a statement on Friday. “GFG has successfully established itself in many core markets, emerging as a leader in the online fashion sector,” said Oliver Samwer, chief executive officer of Rocket Internet.

The latest financing gives GFG the capital required to pursue growth, he said. The financing will provide GFG to continue investing in its portfolio companies in emerging markets at a time when valuations of start-ups have been under pressure globally.

The development comes at a time when GFG is in advanced discussions with Softbank Group Corp.-backed Snapdeal to sell Jabong. The deal is estimated to be around $50-75 million largely in cash, which would allow Rocket Internet and Kinnevik to exit Jabong.

Mint reported earlier this month that Snapdeal was one of the front-runners to buy Jabong

Rocket Internet merged Jabong with online fashion retailers in Latin America, Russia, the Middle East, South-East Asia and Australia to create GFG in September 2014.

GFG houses the German e-commerce company’s fashion businesses from emerging countries, including Jabong, Latin America’s Dafiti, Russia’s Lamoda, Namshi in the Middle East and Zalora in South-East Asia and The Iconic in Australia..

At the end of May, Jabong reported a 14% increase in revenue to €32.6 million for the March quarter. The Gurgaon-based firm’s adjusted Ebitda (earnings before interest, taxes, depreciation and amortization) loss narrowed to €11.9 million from €16.3 million in the same quarter a year earlier.

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