Rocket Internet cuts valuation on fashion portal, raises $339m

The figure, reported by Rocket in a release, represents a sharp cut from the EUR3.1 billion valuation the incubator recorded last year. Kinnevik, in its first quarter report, gave the same valuation, down from its prior calculation of EUR1.7 billion. Kinnevik said it calculated the value of GFG based on the company's last annual revenue figure and net cash position, along with those of similar listed companies.

GFG's valuation cut comes amid wider declines in valuations for tech start-ups globally. In Asia, mutual fund T. Rowe Price and Morgan Stanley both marked down their valuations of Indian e-commerce giant Flipkart by 15% earlier this year. T. Rowe Price also marked down several other tech companies in its portfolio, including Uber, by 6%, and Dropbox, by 16%.

Rocket will contribute EUR100 million in the funding round, with Kinnevik committing EUR200 million; additional existing shareholders will have the option to invest as well. Kinnevik has already contributed EUR50 million to GFG in a loan earlier this year.

"During the first quarter of 2016 we have made significant progress on our path to profitability, reducing the loss from operations meaningfully in comparison to the first quarter," said Romain Voog, CEO of GFG. "This is in line with GFG's plan to deliver an accelerated path to profitability across its regional businesses while continuing to capture the significant market opportunity available."

GFG was formed in 2014 by combining five emerging markets fashion e-commerce brands, including India's Jabong and Southeast Asia and Australia-focused Zalora. The company has raised several rounds of funding since its launch, including a EUR32 million round from Tengelmann Ventures and Verlinvest in March 2015 and another EUR32 million from Kinnevik the following month.

Founded in 2007, Rocket makes investments across the e-commerce, marketplace and financial technology segments. Its ventures include emerging markets-focused food delivery app FoodPanda, which launched in 2012 and has bought out peers across several Asian markets, and Southeast Asia-based e-commerce platform Lazada, recently bought by Alibaba for about $1 billion.

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• Topics
• South Asia
• Southeast Asia
• Expansion
• Technology
• Consumer
• Performance
• India
• Growth capital
• Rocket Internet
• TMT