Rocket Internet SE today announced that it is participating in a EUR 150 million ($166 million) internal financing round in Global Fashion Group (GFG).
Rocket Internet will invest its pro rata share of the financing round amounting to EUR 37 million and has undertaken to guarantee an additional part of the financing round amounting to a maximum commitment of EUR 49 million. It has furthermore agreed to contribute the two Brazilian online fashion businesses Kanui and Tricae from its Latin America Internet Group in a share for share transaction to realize further synergies, as mentioned in the company’s official blog post.
The financing round will provide GFG with additional capital to solidify its position in the emerging market of fashion e-commerce. The investment will be used to strengthen GFG’s fulfilment, marketing and product development as well as to build the infrastructure to capitalize on the synergies between GFG’s online fashion businesses in Latin America, Middle East, Russia & CIS, India, South East Asia and Australia.
The financing round and the strategic acquisition value GFG at EUR 3.1 billion. Rocket Internet post the latest funding round will hold at least 24.2% company’s shares (1.9% directly and 2.3% indirectly through Latin America Internet Group). Earlier it owned 23.0% of the GFG and Kinnevik owned 25.4%.
Romain Voog, CEO of GFG, commented: “The additional capital will give us an exceptionally strong run-way and allow us to capitalize on the massive growth opportunity of fashion e-commerce in emerging markets. In addition, the strategic acquisitions of Kanui and Tricae enable the integration of two great businesses that have a natural fit with our Latin American brand Dafiti and are acquired at attractive terms.”
In April 2015, GFG had raised $35 million from Tengelmann Ventures and Verlinvest, at a post money valuation of over $3 billion.
GFG was founded in 2011 by Rocket Internet and Kinnevik. It operates across four continents and 27 countries, with a focus on emerging markets, including India, SEA, Latin America, Middle East and Russia.
Rocket Internet had merged 5 emerging fashion brands into a single entity with its co-investor, Kinnevik, that include- Dafiti(Latin America), Jabong (India), Lamoda (Russia and CIS), Namshi (Middle East) and Zalora(South East Asia and Australia), and since then this group is known as GFG (Global Fashion Group).