Rocket Internet’s Global Fashion Group (GFG), an umbrella group that houses the German company’s fashion-focused e-commerce services for emerging markets, made a double announcement today after revealing that it secured €150 million ($167 million) in fresh funding and acquired two Rocket Internet-backed companies in Brazil.
The group, which was formed when five Rocket-backed companies combined last September, raised $35 million as recently as April. That April raise was carried out at a valuation of €2.8 billion/$3 billion. Now, with two more portals under its belt, GFG has an implied post-money valuation of €3.1 billion, or $3.45 billion. The new capital is led by existing investors Kinnevik and Rocket Internet and will go towards general costs and expanding logistics, the company said.
“The proceeds will mainly be invested 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 organization said in a statement.
On the other side of the news, GFG has picked up sports and outdoor activities commerce company Kanui, and kid/baby-focused online retailer Tricae. Both the deals are undisclosed — GFG called the terms “attractive” — and the two Brazil-based business will be integrated into Dafiti, the group’s e-commerce site operating in Latin America.
Important caveat here though, these ‘acquisitions’ area more like consolidation plays from Rocket Internet. The German organization poured $6.5 million into Tricae in 2012, its investment in Kanui is not disclosed.
GFG did provide some figures for its new acquisitions. It said that Kanui grossed more than €30 million (around $33 million) in 2014. Tricae, it claimed, generated over €20 million ($22 million) in revenue. Missing here, of course, are details of profitability/loses, but the point is that these services are not immature and will add to GFG’s presence in Brazil.
In addition to Dafiti, GFG includes Namshi (Middle East), Lamoda (Russia), Jabong (India) and Zalora (Southeast Asia). That gives it reach in four continents and 27 countries, across which the organization said it employs 9,500 people.
Following today’s announcement, Rocket Internet — which incubated the company — now owns 24.2 of the company. That’s important to note, since it seems increasingly likely that GFG’s exit will be via an IPO, the same route that Rocket Internet itself took when it listed in its native Germany last October. Indeed, the fact that GFG’s largest investors led this round — which is significantly smaller than past investments in GFG companies — suggests that an IPO is close and that existing shareholders are maneuvering themselves and their investments in preparation for that exit.
We’ve asked Rocket Internet for comment on a potential listing — don’t hold your breath on anything but ‘no comment’ — but for now the company is talking up the potential of e-commerce in emerging markets, which includes many countries where the likes of Amazon, Alibaba and others are yet to enter.
“We continue to be very excited about the prospects of international online fashion and GFG in particular. Romain and his team have made great progress in integrating the international businesses and the acquisitions of Kanui and Tricae will add further to GFG’s presence and ability to realize synergies,” Oliver Samwer, CEO and founder of Rocket Internet, said in a canned comment.