US-listed online auction company eBay has agreed to acquire Brands4Friends, a Germany-based internet shopping club backed by strategic investors Holtzbrinck and Tengelmann Group, for €150m ($200m).
Doug McCallum, senior vice president for eBay in Europe, in a statement said: "With the acquisition of Brands4Friends, we will enter the online shopping club market with an established partner."
Online shopping clubs now account for about 20% of online fashion sales in Europe, according to eBay’s research.
Founded in 2007, Brands4Friends has about 3.5 million members in Germany and another one million from its international subsidiaries, brands4friends.jp and SecretSales.com, it backed earlier this year.
As part of the acquisition, eBay will assume Brands4Friends’ equity interests in UK-based SecretSales.com, which was also launched in 2007, and Japan’s Brands4Friends.jp.
Venture capital (VC) firm Partech International and Holtzbrinck Ventures, the corporate venturing unit of media group Holtzbrinck, were co-investors in the launch of Brands4Friends.jp in March.
Partech had also led Brands4Friends’ series C round in November 2008, which raised €10m and had Holtzbrinck Ventures and Luxembourg-based VC firm Mangrove Capital Partners reinvest.
Holtzbrinck Ventures had been a seed investor in Brands4Friends along with angel investors Lukasz Gadowski and Kolja Hebenstreit, who the following year merged their portfolio companies to form Germany-based VC firm Team Europe Ventures.
Earlier this year, however, Team Europe sold its stake in Brands4Friends to the world’s fourth-biggest retail supermarket and distribution groups, Tengelmann. Hebenstreit said: "The market rumors are that we sold for a three [digit – more than €100m] value. There was another financing round after our investment."
Allen & Company was financial adviser to Brands4Friends, which posted revenues of €80m last year up from €25m in 2008, on the sale to eBay.
Separately, US-based fund manager HarbourVest will co-invest with Holtzbrinck Ventures to set up a fund. The external investment follows the independence of Hubert Burda Media’s corporate venturing unit to form Acton Capital Partners in 2008.