E-commerce group Alibaba agreed today to pay $1bn to increase its stake in Singapore-based e-commerce platform Lazada from 51% to 83%, allowing corporates Rocket Internet and Tesco to exit
Lazada is a diversified online marketplace that operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, selling stock from about 2,500 brands and more than 100,000 local and international merchants.
The deal values Lazada at $3.15bn and will provide exits for e-commerce holding company Rocket Internet, where Lazada was incubated, and which sold an 8.8% stake for $276m, retail group Tesco and investment firm Kinnevik, Lazada CEO Maximilian Bittner told Tech in Asia.
Singaporean state-owned investment firm Temasek will be the company’s only remaining external investor once the transaction is closed.
Alibaba had already invested $1bn in Lazada in April 2016, acquiring $500m in new shares and spending $500m to partially buy out shares held by existing investors including Rocket Internet, Tesco and Kinnevik, at a $1.5bn valuation
Rocket Internet sold a 9.1% stake in 2016 for $135m, and together with the latest investment it has generated a $411m return on a cumulative investment of only €18m ($20.4m at current exchange rates).
Lazada had previously raised more than $685m in funding from investors also including retail group Tengelmann, conglomerate Access Industries, investment bank JP Morgan, Verlinvest, Holtzbrinck Ventures and Summit Partners.
Alibaba’s control of Lazada will give it a greater footprint in Southeast Asia, which represents a logical growth point from its Chinese base. The firm opened its first logistics hub in the region in Malaysia in March this year.
Daniel Zhang, Alibaba Group CEO, said: “As a market leader, Lazada has demonstrated its ability to execute and further lead the region in products and services with the best consumer experience in Southeast Asia while growing a strong ecosystem that supports small businesses going online.
“The e-commerce markets in the region are still relatively untapped, and we see a very positive upward trajectory ahead of us. We will continue to put our resources to work in Southeast Asia through Lazada to capture these growth opportunities.”