Amazon to Reportedly Acquire Jabong in a Billion Dollar Deal

Jabong_iamWireWhile the speculations have been going on in the media from over a month now around Amazon acquiring Rocket Internet backed Jabong, the same might be coming true very soon.

In October, publishers like Firstpost, ET, Trak etc. reported that the two firms might be shaking hands, but in a recent development it has surfaced that the first stage of talks for Amazon to acquire Jabong have been completed. And Amazon would acquire the company in a deal amount worth USD 1-1.2 Billion.

Jabong is a part of Rocket Internet’s Big Foot Retail (Family of Jabong, Dafiti, Lamoda, Namshi and Zalora), hence the billion dollar deal might involve these other international retailers too.

A source with the knowledge pertaining to this matter told VCCircle that post acquisition, Amazon would keep Jabong as a separate entity. Jabong is an inventory based e-tailer, where FDI in not allowed, and the structure of the deal hasn’t been revealed

During January-June 2014 period, Jabong reported Gross Merchandise Value (GMV) of INR 509.5 crore from 3.197 million orders. The company has two other major shareholders besides Rocket Internet i.e. Swedish investment firm Kinnevik and UK’s CDC.

Big Foot Retail with Rocket-Internet backed sites such as Jabong, Dafiti, Lamoda, Namshi and Zalora claims to have worth around USD 2.5 billion as of September 30, 2014.

Also Read: Finally, Flipkart and Myntra tie their knots!

If the deal goes through, then Amazon would be able to compete with Flipkart neck to neck. Myntra and Jabong both are preferred fashion destinations, despite of Amazon & Flipkart having multiple categories including apparel. Flipkart’s marriage with Myntra, gave it an edge over Amazon. However now if Amazon gets Jabong, it would have the same ammunition to stay in the competition.

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