Zalora, a Singaporean fashion and beauty e-tailer backed by Rocket Internet, has scooped up €20 million (about $26 million USD) from German retail conglomerate Tengelmann Group, just six months after it landed an undisclosed sum from JP Morgan. In addition, Zalora told us it has also started building a regional software development center in Singapore to develop its Web platform, as well as mobile apps.
Tengelmann has already invested in several other Rocket Internet interests. Last month, Linio, the so-called ‘Amazon of Latin America,’ reportedly raised about €15-20m range from the German company. In January, online marketplace Lazada, another Southeast Asia e-commerce site, announced that it picked up a round of strategic funding from Tengelmann. Sources close to that deal told TechCrunch that it was worth close to $20 million.
Zalora currently operates in Hong Kong and Taiwan, as well as across Southeast Asia in Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. Since its launch early last year, the e-commerce site says it has achieved “annualized double-digit million” revenues and now employs more than 1,000 people. As Rocket Internet expands their fashion business to more markets with Zalora and other investments, they can become a stronger buyer, cutting costs and improving margins. Rocket Internet’s relationship with Tengelmann, which has more than 4,000 stores across 15 different countries and annual revenues of over €10 billion, can help it become a more important player in retail.
Zalora not only represents more build-up in developing markets for the Samwer brothers, but with its software innovation center, investing in the Singaporean retailer may also be an attempt by controversial Berlin-based incubator to show that it can innovate in addition to cloning successful business models–though that may be more of a PR move than anything (Linio is an Amazon clone, while Payleven is a duplicate of Square, and Zalora is often referred to as ‘the Zappos of Asia.’
But innovation aside, Rocket is still building out e-commerce companies in emerging markets that are attracting hundreds of millions in investment dollars. The Singaporean site’s other investors include JP Morgan–which, like Tengelmann, is also a repeat investor in Rocket Internet-backed companies. The company did not officially disclose the terms of the funding it received from JP Morgan in September, as is usual for investments in Rocket Internet companies, but Zalora told us that the value was in the “significant double digit millions” of dollars. Last fall’s deal was the seventh investment made in a Rocket Internet company by JP Morgan in the space of just a month.