Lazada, Rocket Internet’s Amazon Clone In Southeast Asia, Raises $250M Led By Temasek

Next Story

What’s Next For Firefox?

We don’t often see companies announce funding rounds on the weekend, but that’s not stopping Lazada, the Rocket Internet-backed e-commerce firm in Southeast Asia, from revealing today that it has pulled in €200 million (around $250 million) in fresh capital.

The round is lead by Singapore’s Temasek Holdings, which manages a $100-billion-plus portfolio and this year invested in another Amazon rival: Snapdeal in India. The deal includes participation from a number of existing Lazada investors, including Kinnevik, Verlinvest and Rocket Internet, and it values the company at €1 billion ($1.25 billion).

Lazada operates in six countries in Southeast Asia — Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam — largely in tandem with Zalora, another well-backed e-commerce service started by Rocket Internet.

This new funding round takes Lazada to more than $700 million in money from investors. Its most recent round was also $250 million back in December 2013, which included an interesting strategic investment from UK retail giant Tesco. Together, Zalora and Lazada have probably raised around $1 billion in funding, although the valu e of some rounds were left undisclosed.

Maximilian Bittner, CEO of Lazada Group, explained that money will be spent investing in logistics, infrastructure, payments solution and IT systems. Bittner pointed out that Lazada needs to continue to spend because e-commerce is still “in its early days” in Southeast Asia:

This investment provides us with the strategic flexibility to further anchor our leadership position and enhance the shopping experience for our customers. We are extremely delighted to welcome Temasek as a new investor and long-term local partner and we are also very grateful for the continued confidence of our existing investors. To us, it is a clear recognition of our leading regional footprint, and an affirmation of the growth strategy and potential of our business.

Screenshot 2014-11-29 16.07.01

Lazada has not revealed a lot of new figures today, but it did claim that its sellers marketplace — an Alibaba/Rakuten-style platform for third-party retailers — is growing strongly, and it helped GMV (the total amount of transactions from retailers) across Lazada to double since June 2014. Lazada says its marketplace now accounts for 70 percent of its revenue.

Raw figures about its business did reach the public domain this summer, however, as part of Rocket Internet’s IPO in Germany. According to a filing reported by Tech In Asia, Lazada brought in $91.4 million in the first six months of 2014, generating 1.8 million orders from 1.4 million active users. Those modest returns perhaps explain why it has been placing more emphasis on its marketplace.

This funding for Lazada follows a $120 million investment in Jumia, a Rocket Internet e-commerce company in Africa, earlier this week. Rocket Internet companies tend to collect fresh investment in waves, so don’t be surprised if other e-commerce businesses backed by the German group also announce new funding rounds soon.

Rocket Internet is in the process consolidating five of its fashion-focused e-commerce businesses into one single entity — called Global Fashion Group (GFG) — but Lazada, which was initially focused on electronics but has expanded to other verticals, is not part of that group.