India's Myntra to buy Rocket-backed Jabong

The deal values Jabong at $70 million, according to a statement by GFG; Jabong and Myntra will continue to operate separately for now. In a blog post, Myntra said that the purchase of Jabong will strengthen Flipkart's position in the country's online retail sector. Between them Myntra and Jabong have 15 million monthly active users. The two platforms will offer exclusive access to global brands such as Timberland, The North Face and Swarovski.

"We have always believed in the fashion and lifestyle segment and Myntra's strong performance has reinforced this faith," said Flipkart CEO and co-founder Binny Bansal. "This acquisition is a continuation of the group's journey to transform commerce in India. I am happy that we will now be able to offer to millions of customers a wide variety of styles, products and a broad assortment of global as well as Indian brands."

Flipkart has been seeking advantages in its fight to dominate India's e-commerce sector, with local rivals such as Snapdeal and international players like Amazon putting up strong competition. The Jabong acquisition is aimed at boosting the company's sales and user base, as was the acquisition of Myntra itself in 2014 for $300 million.

Germany-based Rocket founded Jabong in 2012 and folded it into GFG in 2014, along with Southeast Asia-focused Zalora and other global fashion e-commerce platforms. The site features more than 1,500 international high-street brands and Indian designer labels, and 150,000 styles from over 1,000 sellers.

Rocket has been looking to sell Jabong for some time; Snapdeal, Paytm and Amazon had been previously mentioned as possible buyers. The $70 million sale price is a substantial decline from the $440 million valuation that Rocket reported for the company in 2013. A previous sale attempt last year was reportedly scuttled due to price issues, with Rocket looking for at least $500 million and bidders unwilling to pay more than $300 million.

GFG has seen its own valuation cut substantially this year by both Rocket and its other principal investor, Sweden's AB Kinnevik. In April, Rocket and Kinnevik both announced they had reduced GFG's valuation to EUR1 billion ($1.1 billion); previously the firms had valued the company at EUR3.1 billion and EUR1.7 billion respectively. The announcement came at the same time as a EUR300 million funding round, later increased to EUR330 million.

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• Topics
• South Asia
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• Buyouts
• Trade sale
• India
• TMT
• Rocket Internet