Rocket Internet, a Germany-based start-up incubator founded by the Samwer brothers and backed by Swedish investment firm Investment AB Kinnevik, has led a $100m series C round of investment for Zalora, a Singapore-based Zappos-style fashion e-commerce site.
Rocket was joined this round by returning Samwer family investing partners including US-based growth equity investor Summit Partners; Sweden’s Investment AB Kinnevik; Verlinvest, the Belgium-based family office of one of Anheuser-Busch InBev’s founding families (€350m assets under management); and the corporate venturing unit of German retail group Tengelmann.
Founded in 2012, the latest round marks Zalora’s largest fundraising to date following two previous rounds including a 2012 series A “significant double digit million” round from JP Morgan and a $26m series B investment led by Tengelmann earlier this year in March.
Other investors in Zalora include US private equity and buy-out firm Invus, which owns big brand portfolio companies, such as Weight Watchers.
Zalora, which has operations in Singapore, Indonesia, Malaysia, Brunei, the Philippines, Thailand, Vietnam, Taiwan and Hong Kong, recently raised the capital to potentially branch out into new countries in Asia and to invest in its logistics capabilities. The business is also investing in new sales platforms, such as its recent launch of an iOS application.
The company is also branding into other e-commerce services, where the company sees local gaps in the E0commerce market. For example, alongside the recent fundraising, Zalora launched a new pilot cash-on-collection service with convenience store 7-Eleven in its home market of Singapore.
Under the pilot project, customers can now choose to pay for and collect their deliveries at participating 7-Eleven stores across Singapore; filling a gap for potential customers that do not hold credit cards or are unable to accept deliveries at home during the day, according to a report by business technology news provider ZDNet.
In 2012, Zalora had a reported net negative income of about €70m ($91m) in 2012. The business projects profitability by 2015 with an aim to hit overall revenues of €1bn in 2016.
Other similar deals include the December 2012 €20m ($26m) investment in Lazada, an Asia-oriented equivalent of Amazon. Rocket helped create the business and lured funds from Summit Partners. The new funds were used to further business development in its five markets of Indonesia, Malaysia, Philippines, Vietnam, and Thailand. At the time of the deal in 2012, Lazada had raised $100m in a span of just four months.
Rocket’s business model identifies successful internet ideas, many of which have been tested and born out of the US, such as Groupon, and the replicates those business ideas to new markets, such as in the case of Germany’s Citydeal. The sites are then often acquired by the original company. For example, Groupon acquired Citydeal for $126m in 2010.