Kinnevik and Rocket Internet join hands for global fashion e-commerce group

Investment AB Kinnevik has entered into a definitive agreement with

Rocket Internet and other co-investors to combine five leading fashion e-commerce businesses, namely Dafiti (Latin America), Jabong (India), Lamoda (Russia & CIS), Namshi (Middle East) and Zalora (South East Asia & Australia) to create a new global fashion e-commerce platform called Global Fashion Group (GFG).

GFG will operate across the five continents with a focus on growth markets, covering 23 countries with a 330 billion euros (434 billion dollars) fashion market and population of over 2.5billion people who continue to move rapidly online and purchase via e-commerce. GFG will market a wide assortment of leading international apparel and accessories brands, a tailored selection of highly engaging internally developed brands and local assortments developed for specific ethnic markets notably in India, Indonesia and the Middle East.

GFG will maintain multiple business models including full inventory, branded shops and marketplaces tailored to the opportunities within the local markets. In addition, GFG will continue to explore the development of adjacent categories like personal care. Mobile commerce will remain a core focus for GFG through the continued development of mobile applications aimed at the growing smartphone user base in its territories.

The combination will improve global best practice sharing across functions, deliver economies of scale in sourcing international brands and marketing with global media channels, strengthen the private label efforts, enhance GFG's ability to attract and retain top talent, accelerate development of technology platforms, and enable GFG to acquire a leadership position in growth market fashion e-commerce.

Since launch in 2011 and 2012, the five e-commerce companies have attracted funding in excess of one billion euros (1.3 billion dollars) from Kinnevik, Access Industries, Summit Partners, Verlinvest, Ontario Teachers' Pension Plan, Tengelmann and a number of other investors. With approximately 350 million euros (460.1 million dollars) of cash as of 30 Jun 2014, GFG is well capitalised to continue to execute on its plans and capture its growth opportunities. For the purposes of the combination, the five companies were valued according to their last funding rounds, resulting in a valuation of 2.7 billion euros (3.5 billion dollars) for the combined entity.